Cryptocurrency market continues to decline

FXOpen

The price of Bitcoin has been moving within the range above $6,000 during the last two weeks. However, on Wednesday, November 14, the rate fell to the year low at 5,523 dollars. The cryptocurrency has lost about 13% of its value in less than five hours. The total market capitalization also fell below $100 billion for the first time since November last year and is currently at the level of slightly above $76 billion. On Tuesday, November 20, the price dropped to $4,500.

Cryptocurrency market continues to decline

The dip of Bitcoin had a domino effect on crypto markets. The five largest cryptocurrencies also fell by more than 10%, and the market cap fell below $200 billion. Bitcoin Cash, which was forked on November 15, was the biggest misfit, quickly losing 15% of its value.

There is no consensus among experts regarding the causes of price collapse. Tanooj Luthra, co-founder of the network, which consolidates transactions on Ethereum, pointed to two events that occurred at the same time with the crypto market collapse.

The first event was Bitcoin futures expiration. The second possible reason for the fall of cryptocurrency market is the fork of Bitcoin Cash, which was divided into Bitcoin ABC and Bitcoin SV.

Luthra says that the fork can lead to a shift in mining resources, because both cryptocurrencies use the same algorithm of launching new coins. If the price of one of these two (Bitcoin ABC and Bitcoin SV) rises, it becomes more efficient for miners to start mining more valuable coins. Mining is an important factor in determining the availability and trading of cryptocurrencies in the markets. Despite the sharp drop in prices, Luthra is optimistic about cryptocurrency markets. This year it is much more realistic to use the actual profitability of cryptocurrencies.

Another expert, Chris Burniske, the author of a book on cryptoactive assets, rejects the BCH fork reason for the fall. He believes that this is not relevant for the price of Bitcoin. Derek Urben, CFO & Director of Business Development at Coinigy, a cloud-based trading platform, agrees with this view and says that Bitcoin has another opportunity to fall by the end of this year. According to him, the Network Value to Metcalfe ratio (NVM), which is used to value bitcoin based on growth in its network, is not “supportive” of bitcoin’s current price.

This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

Latest from Financial Market News

Weekly Market Wrap With Gary Thomson: US500, USD, US Inflation, USD/JPY Australian Dollar Volatility Ends in Lull Ahead Of US Data Weekly Market Wrap With Gary Thomson: CHF, CAD, GOLD, TSLA Weekly Market Wrap With Gary Thomson: CAC 40, AUD, OIL, AMAZON The US Continues to Trump the Euro Economy on Key Metrics, But What Is Next?

Latest articles

Trader’s Tools

What Are the Analytical Forecasts for Natural Gas Prices From 2024 to 2029?

Exploring the dynamics of the natural gas market reveals intricate patterns shaped by a range of factors. This FXOpen article delves into analytical natural gas price predictions for 2024 and the next 5 years, offering insights into potential trends and

Forex Analysis

US Dollar Shows Record Weekly Gain Since Mid-January

The US dollar strengthened on Friday ahead of a series of highly anticipated central bank meetings next week, including the US Federal Reserve. The dollar rose 1.3% for the week, its biggest gain since mid-January, after a mixed batch

Shares

Tesla Stock Hits a Low Point as Musk Sues Openai - Is This Year a Total Write-Off?

Occasionally during the course of industrial progress, there is a maverick; a voice that is known for continual disruption and maintaining a high-profile position whilst engaging in such disruption. The figure of this decade is Elon Musk, a self-starter whose

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 65.68% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.