The bitcoin price plunged below $10,000 on Wednesday as this week’s comprehensive market correction intensified.
The cryptocurrency markets have been in a free-fall this week, and the downward spiral continued this morning. The cryptocurrency market cap dove below $500 billion, and the bitcoin price sunk as low as $9,663 on Bitfinex, marking the first time it has dipped below $10,000 since Dec. 1.
At present, bitcoin is trading at $10,053 and its market cap is just $170.9 billion, which represents a single-day decrease of 16 percent and a year-to-date decline of more than 28 percent.
Notably, bitcoin is still trading as high as $10,389 on GDAX, a professional order-book exchange operated by bitcoin brokerage firm Coinbase, but the flagship cryptocurrency is priced below $10,000 on OKEx and Binance.
There are several factors that could be contributing to this week’s correction. Both China and South Korea have indicated a harsher stance toward domestic cryptocurrency trading, with China planning to block residents from accessing foreign exchanges and South Korea curbing the ability of retail investors to moonlight as day traders.
This week, South Korea’s military reportedly blocked soldiers from accessing cryptocurrency exchanges while stationed on military bases. The Justice Ministry, meanwhile, sought to ban cryptocurrency exchanges outright, although the government later cooled those fears.
However, it seems doubtful that these developments alone would cause such widespread turmoil within the global markets. As ShapeShift CEO Erik Voorhees said earlier today, “there is not necessarily a ‘reason'” that markets rise and fall, which suggests that it might be futile to search for a definitive trigger.
In any case, however, recent cryptocurrency investors are getting their first taste of a true market correction. Someone out there purchased bitcoin for $19,891 on Bitfinex on Dec. 17, and the value of those coins has effectively been cut in half over the course of the past month.
How these investors respond to this sudden downturn could determine whether bitcoin is consolidating before a breakout or entering a bear market.
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Last modified: May 20, 2020 9:10 PM