It would not be a great exaggeration to call November 15, 2018 “ black Thursday ” for the cryptocurrency market. Bitcoin rate, which since the middle of October was practically without movement around $ 6,500, dropped sharply to the psychologically important mark of $ 6,000, and continued to fall. It was not possible to break the downtrend in the following days – as of Tuesday morning, November 20, the bitcoin rate was about $ 4,700. Following the bitcoin, the collapse of the entire cryptocurrency market began, reaching an annual minimum in terms of capitalization.
Speaker – Arseny Immortals, analyst at Zichain
This turn of events came as a complete surprise to the majority of bidders who trusted the opinion of a number of reputable analysts and, conversely, were in anticipation of the New Year rally.
The beginning of the fall of the Bitcoin rate put hardfork Bitcoin Cash (BCH) , the fourth largest cryptocurrency capitalization in the world, which, as a result of the conflict between two groups of users and the lack of consensus on plans for further development, split into two opposing blockchains. The first, BCH ABC, is a group of conditional “conservatives” who advocate maintaining BCH algorithms without radical changes.
The second blockchain – BCH SV (short for “Satoshi’s Vision”) rallied “reformers” around itself under the leadership of Craig Wright, an eccentric investor who had previously announced that he was the creator of the blockchain , hiding under the pseudonym Satosi Nakamoto. This was followed by a “war of hashes,” in which each of the opposing sides tried to attract as many miners as possible under their banners. For this, part of the capacity was taken out of the Bitcoin network, which was the reason for its decline.
Another reason for the massive collapse of cryptocurrency is the high concentration of stop-loss orders at $ 6,000 – the very one that has been considered the “bottom” of the market in recent months. When it was broken, institutional investors began to close positions, thereby stimulating a further fall in rates.
The next important level of support for Bitcoin is at $ 4,500, then – only at around $ 3,000. Upward correction is still possible up to the end of the year, but even with the most optimistic forecast, we are unlikely to see a bitcoin rate higher than the 200-day moving average in the coming months, which is located in the $ 7,000 area.
Thus, it can be stated that the local conflict of interests was the cause of the large-scale collapse of the cryptocurrency market. At the same time, the situation around Bitcoin Cash itself will not have far-reaching consequences for the entire market. Much more dangerous is the loss of confidence in digital assets by institutional investors, which it provoked.