The cryptocurrency market surprised investors once again by creating a massive selloff in prices and market capitalization. The huge drop that has wiped off $60 billion from crypto markets in the last seven days was totally unexpected.
Everything was going well one week ago; the markets were trading in the range of $6500 level for the past two months, and the price volatility was standing at the lowest level of the past two years. Traders and market participants were expecting a bull-run amid the entrance of Goldman Sachs and other reputable institutions in crypto markets.
Crypto Market Today
The latest bloodbath retreat cryptocurrency market capitalization to the lowest level in the past fourteen months. Bitcoin, the largest coin based on market cap, plummeted 29% in previous seven days. Ethereum (ETH) is replaced from the second spot in crypto ranking by Ripple (XRP); Ether lost 36% of its market cap in the past seven days and it is currently trading at the lowest level since May 2017.
Bitcoin Cash (BCH), on the other hand, is the biggest loser during the latest bloodbath. BCH coin plunged more than 50% in past seven days. The steep selloff in BCH price is receiving support from traders concerns over its hard fork event.
Why Cryptos Dropping In November 2018
It’s true that cryptocurrency markets are moving on speculations and market reports. The latest market selloff was triggered by speculations related to bitcoin cash hard fork event and the potential SEC crackdown on irregularities in crypto exchanges.
“The Bitcoin Cash fork and the infighting within the crypto community have definitely had a negative impact on price,” Charles Hayter, and CEO of digital currency data platform CryptoCompare stated. “The conversation around the fork is negative, which is an overhang on the overall market.” Further, he added that “We see conversations around the BCH fork making their way into discussions around all cryptos across the board.”
The depression in the U.S stock market is also considered as a big factor for the bearish trend in crypto markets. Tech stocks are plummeting at a substantial pace while industrial stocks are following the downtrend amid a tug of war between U.S. and China.
“Short term, unexpected weakness in the tech sector could have a significant impact on the global economy, adding to what already looks like a soggier macro environment,” said Dario Perkins, managing director of global macro at TS Lombard, in a note. “Additional retrenchment in the FAANGs could also undermine the broader US stock market.”
Is it a Buying Opportunity?
Analysts always suggest investor buy on the dip and sell when the price is high. However, investors need to analyze how low the cryptocurrency market could go from here. Some analysts see the latest dip in crypto prices as a buying opportunity. Nigel Green, deVere Group’s founder and chief executive, is optimistic about the bounce-back, saying “Prices might fall further over the next few days, but we can expect a long-term upward trajectory for the crypto sector.”