Bitcoin Down 15% in Major Price Adjustment in Cryptocurrencies
Bitcoin prices have fallen by $3,000 in less than 12 hours, from around $16,000 to a low of under $13,000. This compares with the record high of nearly $20,000 last weekend. The sell-off appears to have triggered price corrections in other cryptocurrency markets with only Ripple making gains.
However, despite Bitcoin’s sharp drop, it is only a two week low and the price remains up more than 1,000% this year. At time of writing things appear to have stabilised and prices are up on this morning. Price volatility is currently a feature cryptocurrencies. Bitcoin fell 30% in November and 40% in September, recovering quickly both times.
Bitcoin Cash Launch
While it is always difficult to find simple reasons for market moves, it appears that the launch of Bitcoin Cash this week may have triggered downwards price pressure in Bitcoin. The media attention around Bitcoin Cash brought to the forefront some of the issues Bitcoin faces in preventing its widespread adoption as a payment method, especially the increasing costs and time of making transactions.
New money in the market may have been startled by a rash of bad news stories this week, including the forced closure of the Youbit exchange by hackers and Coinbase’s investigation into potential insider trading around the Bitcoin Cash launch.
Analysts have also identified that after an extraordinary year of price rises investors are likely cashing-in their gains for year end. In an interview with Reuters, Charles Hayter of Cryptocompare said, “A lot of traders have been waiting for this large correction,” adding that, “a lot of investors will be taking profits and saying thank you very much and closing their books for the holiday period.”
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