TechnologyCrypto Crash Prompts Guessing Game as Bitcoin Breaches $10,000 Again

(Bloomberg) -- Cryptocurrencies plunged suddenly in afternoon trading on Wednesday, spurring a guessing game of potential catalyst among enthusiasts and investors. The price of Bitcoin dropped below $10,000 for the first time since July.

The largest digital token fell as much as 5.6%, before trading at $9,686 as of 3:40 p.m. in New York. Peer coins also sold off, with Bitcoin Cash falling close to 4% and Litecoin dropping about 8%.

© Bloomberg Bitcoin dropped as much as 5.6%

As with many things crypto, enthusiasts and skeptics alike were quick to point the finger on Twitter and Reddit, though it remained anyone’s guess as to what the catalyst was.

Bitcoin’s Surge Means Smaller Rivals May Be Due for Rallies

In the crypto world, Bitcoin continues to reign supreme. The largest digital asset is outperforming the next three biggest alternatives this year. It’s managed to hold above the key $10,000 level in the face of increasing headwinds. In times of recent market turbulence, it’s even taken on somewhat of a safe-haven accreditation. But technical indicators show the price action between Bitcoin and alternative tokens is nearing its highest correlation this year, indicating that a so-called alt season may be on the horizon.

“From our end, it looks like it was a sell-off to cash settle futures that are coming due on Friday for BTC,” said Dave Balter, chief executive of Flipside Crypto Inc. in Boston. His firm tracks blockchain transaction data, differentiating between users and speculators, and includes large trades and their originations.

Thin trading volumes likely exacerbated the moves. That made sense to Jeff Dorman, chief investment officer at Arca.

“It’s the week before Labor Day. Half of crypto is at Burning Man and the other half is sitting on their hands doing nothing,” he said. “Volumes are low and it takes very little to move markets right now, and you have big futures/options expirations coming up at the end of the week. The only definitive thing I can point to is that the move was led by declines in EOS, ETH, XRP, BCH, LTC and other large-cap tokens that have been out of favor for months. I just don’t think there are a lot of investors willing to defend price right now.”

To contact the reporters on this story: Vildana Hajric in New York at vhajric1@bloomberg.net;Olga Kharif in Portland at okharif@bloomberg.net

To contact the editors responsible for this story: Jeremy Herron at jherron8@bloomberg.net, Dave Liedtka, Rita Nazareth

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Bitcoin weak - Where is the problem?

After recovering from the April low near $ 6,000 and even scratching the $ 10,000 mark, Friday's downhill has been down. Bad news from Korea burden.

As reported by Reuters on Friday , the Korean UpBit is under suspicion of fraud. The website of the world's fourth-largest crypto exchange states that people are being prosecuted but are working diligently on it. Furthermore, all transactions including payouts work normally. "Your assets are securely kept in your account," is probably the most important sentence in the statement. Further details are not known yet.

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The example clearly shows that regulation is needed to a healthy degree. Only then will institutional investors enter the market with great capital and help bring the cryptos back to new heights.

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In the short term, the Blockchain Conference Consensus in New York, which started on the weekend, could provide a positive impetus. Consensus is one of the largest events of its kind. 8,000 people are expected and the ticket costs $ 2,000. In the last three years, the conference has always been followed by a bullish reaction from Bitcoin.

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