Overnight, the crypto market has lost about $16 billion of its valuation as it dropped from $123 billion to $107 billion.
The Bitcoin Cash price fell to a double-digit at $94 for the first time in its 16 month history. Upon the execution of a contentious hard fork in August 2017, Bitcoin Cash debuted in a volatile range of $2,000 to $4,000.
On December 6, CCN.com reported that a further drop for Bitcoin (BTC) to $3,000 could be unavoidable, due to the sheer intensity of its sell-off throughout the past month.
At the time, technical analyst DonAlt, said that a drop to $2,900 could become a possibility if the dominant cryptocurrency fails to sustain any momentum in the high $3,000 region.
“Closed below support, not looking too pretty. BTC needs to reclaim supports quickly otherwise. I expect it to go for the previous lows. If those don’t hold I’m looking at $2,900. There are no supports left on the daily, hope for a fakeout or SFP at the lows,” DonAlt said.
Regarding Ethereum (ETH), which experienced the steepest drop amongst all of the major cryptocurrencies in the market throughout the past four to five weeks, the analyst said that the asset is currently demonstrating weakness based on virtually every technical indicator:
“Finally far enough down to attract my interest again. Took out the low, right into daily support. A strong daily close today would open up some swing long possibilities. A weak daily close today and I’d definitely stay away.”
When Bitcoin and large market cap digital assets initially dropped in mid-November, some analysts including DonAlt suggested that the low volume of the assets is concerning because, without significant sell volume and sell-pressure, the sell-off of cryptocurrencies demonstrate a free-fall.
The volume of major digital assets never regained momentum in the past month and as sell-pressure increased with large holders moving their dormant addresses, the value of cryptocurrencies started to fall by large margins.
As of December, only Bitcoin has been able to avoid a drop larger than 85 percent from its all-time high at $19,500.
Ripple (XRP), EOS (EOS), Stellar (XLM), and Bitcoin Cash (BCH) have all fallen by more than 91 percent from their all-time highs, with BCH down a staggering 97 percent.
Throughout the past nine years, the cryptocurrency market experienced five major corrections with an 85 percent drop in value on average. For Bitcoin to record an 85 percent drop from its all-time high, its price would have to fall to $2,950.
The market is in a bad place and while Bitcoin has fallen to a new yearly low, it still remains down less than 85 percent from its all-time high. If digital assets continue to demonstrate a lack of trading activity, a proper bottom could take more time to be established in even a lower price range.
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Featured Image from Shutterstock. Charts from TradingView.
Last modified: June 14, 2020 11:04 AM UTC