Nick Chong · 1 week ago · 2 min read · Insights via Grayscale Investments
Bitcoin › Altcoins
Bitcoin Obliterates $4000 Support Level; Market Loses Another $18 Billion, Altcoins Reeling
Within the last 24 hours, Bitcoin has once again made a dive through a historic price support after dropping 14 percent, puncturing its $4000 support-level and settling at a yearly low of $3800.
In the last ten days, BTC has taken a beating, bringing down most of the market. Having experienced its third major drop in the last 10 days, Bitcoin holders have now experienced losses of over $2600 per coin; a 24-hour loss of 12 percent, and a 10-day cumulative loss of 40 percent. Moreover, the overall market downturn reflects Bitcoin’s price.
State of Altcoins
Other cryptocurrencies in the top 10, including Bitcoin Cash (BCH), EOS (EOS), Stellar (XLM), and other altcoins are down 10-15 percent across the board. This time around, Ripple’s XRP coin has followed the market trend. The crypto has so far lost 12 percent, rather than holding steady, as seen in other market drops. Factom has again defied the market with gains of 5 percent.
The biggest losers this dip include MonaCoin, Mithril, and WaltonChain, with losses between 20 and 30 percent. Of the top 20, Stellar and Zcash have experienced the largest drops with losses of 17 and 16 percent.
What Caused the Drop
Analysts have attributed the drop to several different factors. The drop may have been fueled by the discovery of price manipulation by stable coin issuer Tether. Researchers found that the company may have been printing USD Tether (USDT), a cryptocurrency allegedly backed by 1 USD per coin, without any backing at all.
These actions were reportedly done in conjunction with the major crypto exchange Bitfinex in an attempt to drive up market prices. The incident came to a head when the U.S. Justice Department launched an investigation.
Another possible explanation for the downturn is the SEC’s increasing scrutiny of the market. The Commission issued its first judgments on two ICOs, cracking down on Paragon Coin and AirToken.
These judgments were issued shortly after the founder of the decentralized exchange EtherDelta, Zachary Coburn, was penalized for illegally operating a securities exchange.
These actions may indicate that the SEC is willing to drop the hammer on projects in the future, spooking the market and investors.
One final reason could be the factional dispute within Bitcoin Cash. BCH figureheads Roger Ver and Craig Wright have openly brawled over the future of the cryptocurrency, without resolution. Lack of consensus between the two factions caused the coin to fork, splitting the Bitcoin Cash community. The incident could serve as a harbinger for Bitcoin’s fate at the hands of its own mining cartels, further undermining investor confidence.
Or, perhaps, it might be none of the above. The market could be correcting itself after seeing celestial highs in early 2018, returning to levels consistent with the nascent state of the technology. Whatever the reason, it seems that market matadors are prepared to deliver a coup de grâce to market bulls.