In the last 24 hours, the cryptocurrency market suffered one of its worst single-day sell-offs in all of 2018, as Bitcoin (BTC) plunged 11 percent.
The substantial short-term drop in the price of Bitcoin (BTC) demonstrated the sheer intensity of the sell-off on Nov. 14, which was unexpected considering that Bitcoin (BTC) had maintained stability in the $6,300 to $6,800 range for more than three months, since Aug. 9 to mid-November.
Although Ethereum (ETH), Stellar (XLM), Cardano (ADA), Monero (XMR), Bitcoin (BTC), and every other major cryptocurrency fell by around 8 to 11 percent, Bitcoin Cash (BCH) suffered an 18 percent drop in value overnight as the worst performing major cryptocurrency in the global market.
What Triggered the BCH Drop?
On Nov. 15, BCH is expected to hard fork its protocol and run a planned update. However, a camp led by Craig Steven Wright, Coingeek, and billionaire Calvin Ayre proposed a contentious hard fork proposal and have threatened to mine an invalid block to create a split chain.
Major exchanges including Coinbase have announced support for the original BCH network with the roadmap set forth by bitcoincash.org. Initially, the support for ABC and BCH led investors to be optimistic about the short-term trend of the asset.
Subsequent to a contentious hard fork, two chains of the original blockchain are formed. BCH and BSV will be created after the hard fork and the holders of BCH are rewarded with BSV at a 1:1 ratio.
To receive the free BSV, Bitcoin Cash holders started to accumulate a significant amount of BCH, pushing the price of BCH up from $430 to $630 at its highest, by more than 50 percent.
However, in the past several days, the conflict between the BCH and BSV camps intensified, as Craig Wright threatened to sue all of the miners and developers supporting BCH. Calvin Ayre also started to redirect computing power from BTC to BCH, threatening to conduct a 51 percent attack against BCH.
“I will ensure that ANY miner passing DSV can be held liable (under the law of the UK, China and US, they can be) The end will be a drop in value for those using DSV And, I will help ensure those who lose claim against this act. The developers in ABC will be able to be held personally liable. Oh… I do have a Masters in Law on just this area.”
In response, Bitmain co-founder and billionaire BCH supporter Jihan Wu stated that the BCH community is working to kick CSW out of the community, possibly by not supporting BSV and uniting miners in China to oppose it.
“The whole BCH community are working together to kick Fake Satoshi out. The resistance against cult leader proves the inner strength and sophistication of the BCH ecosystem.”
On Nov. 14, Craig Wright claimed that 2014 prices of cryptocurrencies are imminent if the conflict between BSV and BCH continues, and damages BTC as a result.
“Oh. And Jihan Wu and Roger Ver selling… they will also have to sell BTC to pay rented hash. If this is a long war, expect 2014 prices in BTC. Think what that does.”
The continuous conflict between the two camps led investors to lose confidence in the short-term trend of BCH, which ultimately led BCH to drop by more than 50 percent within a seven-day span.
Where is Market Heading
Within the past 24 hours, the cryptocurrency market has seen a wipeout of more than $26 billion, from $210 billion to $184 billion.
Due to the magnitude of the drop, it will be difficult for the crypto market to experience a corrective rally. As a technical analyst and cryptocurrency researcher Willy Woo stated, a recovery by the second quarter of 2019 is likely, given various technical indicators like the NVT ratio that consider the fundamentals of the blockchain.
Cover Photo by Bárbara Montavon on Unsplash