If you’ve been following the cryptocurrency market at all, you’ve probably heard about Bitcoin Cash by now. You’ve probably also heard that Bitcoin Cash is crashing, which has affected other cryptocurrencies like Litecoin, Ethereum, and Ethereum Classic as well. So why is Bitcoin Cash crashing? There are several factors to take into account when determining why the largest cryptocurrency in the world keeps crashing, but we can boil it down to two main reasons: bitcoin cash’s uncertain future and the real possibility of another split coin on Aug. 1st, 2017. Why Bitcoin’s Largest Cryptocurrency Is Crashing
What Happened To Bitcoin?
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Last year, bitcoin reached its all-time high of almost $20,000. But now it’s fallen back down to around $7,000 – a drop of more than 50%. What happened? Here are some of the major contributing factors. The price of bitcoin tends to be volatile and highly unpredictable. This means that in any given day, for reasons both known and unknown, bitcoin can swing dramatically up or down in value compared to other currencies like dollars or euros. One day last December, for example, one coin was worth nearly $20,000; by June it had lost half its value; by September it had recovered much of that loss; then came another crash and another recovery; as we write in late November 2018, one coin is worth about $6200 (it was worth about $5000 just three days ago). Why has bitcoin been falling so much lately?
What’s Causing The Price Drop?
The recent drop in price likely occurred due to technical reasons. The most popular cryptocurrency by market cap has been trading sideways for several weeks and failed to break above key resistance at $8,500 (50-day moving average). It appears that bulls lost steam after testing support at $7,900, which marks a key Fibonacci level.
Bulls are now aiming for a pullback towards $7,300-$7,400 before attempting another run at its all-time high. Meanwhile, bitcoin’s dominance is nearing its highest level since December 2017. It was last seen bouncing off highs near 38 percent and could be gearing up for a move higher—but not without potential resistance from major altcoins such as ethereum and ripple.
Should You Buy Or Sell Now?
If you believe that cryptocurrencies are here to stay, then it makes sense to hold onto your coins for as long as possible. But if you’re planning on selling in a couple of years, right now might be a good time to start listing all of your holdings online and putting up ads on sites like Craigslist or eBay. While most people can’t turn over their Bitcoins fast enough, some people are more patient—and waiting out massive crashes in price may pay off big time in a few years’ time. For example, at one point last year, Bitcoin was trading for around $619 per coin and less than two months later was worth close to $4,000. Because nobody knows where it will bottom out at—or when—selling early could be foolishly risky.
Can The Price Recover?
No one knows exactly why bitcoin is falling, but there are a few key factors that may be impacting it. For starters, Chinese regulators have been tightening their grip on cryptocurrency trading platforms and exchanges—in response to China’s growing concerns over ICOs and illegal financial activities. Officials say some ICOs have turned out to be nothing more than Ponzi schemes; as such, they require increased oversight and regulation. This move was likely due to China’s recent clampdown on ICO funding (although it remains unclear if regulation will ever extend outside of China). Another theory is that bitcoin is crashing due to its own success: Transaction volumes are getting so high that fees are up 55% since last year.
Is This Sign Of A Takedown?
One of Bitcoin’s largest cryptocurrencies, Cardano (ADA), is losing value at a rapid pace. The coin has fallen from $0.9 to $0.12 in 24 hours and many people are speculating that its drop is part of a takedown against cryptocurrencies in general. While nobody can be certain why exactly ADA has dropped so sharply over such a short time frame, its current situation should serve as a lesson to cryptocurrency investors who have grown accustomed to making quick gains—particularly when it comes to buying high-risk, high-reward coins like Cardano and Tron (TRX). While both coins have experienced big price spikes over their short lifetimes, they’ve also experienced major lows and corrections since their initial creation/release.
History of Significant Low Prices
For example, as of March 24, 2018, one unit of bitcoin (BTC) was worth around $8,200. In December 2017 that same unit was worth around $19,800. That’s a significant drop — and it could mean big trouble for those who aren’t prepared. But if you’re in tune with cryptocurrency (and have been holding on to your BTC), you may be sitting on top of a potential fortune. A lot of traders will buy BTC when it plummets because they think its price will rise again. They hold onto their bitcoins until it spikes up and then sell them off for an even greater profit. This process is known as buy low and sell high.
What Do Other Experts Think?
Adam White, Vice President of Business Development and Digital Asset at Coinbase said that the narrative of ‘Bitcoin is dead’ was being pushed by traders who wanted to take advantage of a dip in price. In an email to CNBC, White says he believes investors should avoid taking part in what he calls fear-driven behavior. Instead, White encourages them to focus on how blockchain is continuing to evolve: more and more use cases are coming online every day as interest grows around digital assets.