In the last 24 hours, the total market capitalization collapsed for almost 14%. Now, everyone is concerned only with two questions: what happened and when will it end?
While the best minds of the crypto world still keep silence. Let’s start with the reasons, what could be the main catalysts.
There are several things going on today:
- Bitcoin Cash (BCH) hard fork dispute
- CBOE futures closing today
BCH is doing a hard fork resulting in Bitcoin ABC and Bitcoin SV on November 15th. This is because of a dispute between Roger Ver (Bitcoin ABC) and Craig Wright (Bitcoin SV). There might be an all out hashing war between these two as it gets ugly on twitter.
Craig Wrightis threatening on twitter to crash Bitcoin in a sell-off to fund his project.
To all BTC miners…
If you switch to mine BCH, we may need to fund this with BTC, if we do, we sell for USD and, well… we think BTC market has no room… it tanks.
Think about it. We will sell A Lot!
And, have a nice day
(BTC to 1000 does not phase me) pic.twitter.com/oUScEahtWc
— Dr Craig S Wright (@ProfFaustus) November 14, 2018
The tweets were sent two hours after the crash began. Could it be insiders who got to know that things were getting ugly?
Craigs tweet could be seen as a warning that he is willing to bring everyone down in a hash war to kill Bitcoin ABC.
A hash war is where competing mining operations fight for control of a given blockchain. Also called a 51% attack.
Bitcoin SV has the majority of the Bitcoin Cash Hashing Power. If it were to use this power to mine empty blocks on Bitcoin ABC, it could essentially perform a 51% attack and render Bitcoin ABC useless with invalid transactions.
If at all it comes to a hash war, this would cost a lot of money as it needs to be rented. Hence his threat to fund it by selling Bitcoins. His actions show that he is willing to go all-in. There’s little we can do but sit back and watch it all unfold.
After the first sell, a chain reaction of stop losses and bots trigger sells the next round of sells. Then news networks covering this crash, portfolio apps sending notifications, causing the price to continue spiralling downwards.
The other rumour is about the futures closing date on CBOE (Chicago Board of Exchange) where large amounts of OTC (over-the-counter) Bitcoins are dumped on public exchanges to tank the price. The same traders then place large shorts on BTC. The amount they lose on public exchanges is little, but gain enormously on CBOE.
Crypto is flatlining now for months, the volume is low, and is easier to manipulate.
Now, regarding the question of when the decrease will stop. We are afraid that we will disappoint, but nobody can say that reliably. Looking at the Bitcoin weekly chart, we can only assume that if it continues to fall, it will meet the nearest resistance near $5,000. We hope that it will unfold earlier as there are strong indicators of the same. Let’s take a closer look at the technical analysis we have performed below.
- MACD- The Moving Average Convergence/Divergence (MACD) is experiencing a bearish crossover due to the recent drop in its price.
- Chaikin Money Flow- With buyers moving back into the market, it is demonstrating a short uptrend.
- The Stochastic indicator- It is moving into the oversold zone and might see a recovery soon.
- RSI– It is plunging towards the oversold zone and might see a recovery upwards.
- Relative Vigor Index- It is bearish, as seen by the crossover that occurred recently.
- Parabolic SAR- This indicator is bearish as well, with the dots present above the hourly candles.
Conclusion- Bearish trend.
One can also note the long wait for positive decisions from SEC on Bitcoin-ETFs. The absence of large investors in the market, other artificial delays are postponing the cryptocurrency revolution. As for Bitcoin (BTC) directly, now BTC/USDT pair took about 60% of all Bitcoin trade. This means that investors are transferring their funds to the Stablecoins to avoid additional losses.
Ethereum’s free fall
The sad fact is, Ethereum is being failed. Not by its investors but by Numerous ICOs who have chosen its blockchain platform to build their projects. ICOs sell Ethereum collected during the crowdsourcing, thereby the price of ETH is rolling slowly below $200.
It has already led to the fact that this cryptocurrency gave the XRP second place in the CoinMarketCap capitalization rating. But, we think it is nowhere near the end. Ethereum has such strong fundamentals and the best blockchain developers working on making the platform more scalable, secure and private.
At the moment Bitcoin prices have sunk at more the 73% from their peak at the start of this year (Nov 2017- Jan 2018 have seen the peak of bitcoin prices) and that saw Bitcoin prices to rocket to a staggering 19k+ before falling to around $6000 in this September. And this trend is very likely to reverse as is predicted by many experts.
Some experts are even predicting that BTC will reach upto $40k by the end of this year to the Mid of 2019 (This is a prediction made by MrLlew Claasenwho is the executive director ofbitcoinfoundation.org. We do believe that the tides will surely turn and Bitcoin will make a new high by mid of next year and according to us this is no time to sell if your stop-losses have not been triggered.
This is what Mr Draper says to anyone having second thoughts :
People ask me, Are you going to sell your Bitcoin? and I say ‘Why will I sell the future to the past?