The cryptocurrency market this month has touched lows that it never has before. After a quarter of high prices and market capitalisation, the coins are at a loss now, at their lowest points this year.
Bitcoin, the first cryptocurrency in the world, is also down by a significant amount as it barely hovers over the $6,000 USD mark at $6,003.62 USD. In the past the trend has shown that when the price of bitcoin is in decline, the altcoins follow. However, regardless of the fall that Bitcoin is enduring right now, the altcoins are touching rock bottom.
In the last seven days alone the price of Bitcoin has gone from $7,100 USD down to today’s $6,003.98 USD. Market specialists are calling the safety line for Bitcoin at $5,800 USD, below which people believe is the game over phase for Bitcoin and the other altcoins. As the market continues hurtling down and with Bitcoin at just about $6,000 the safety line isn’t far away.
The Altcoins Are Bleeding
Previously, the well-being of the market depended on how well or how badly Bitcoin did. If Bitcoin prices were up, altcoins would do well and if Bitcoin prices were down, altcoins would follow. But in this crisis, over the last twenty-four hours alone Bitcoin has shown relatively stable in comparison to the altcoins.
With $20 Billion US dollars being dumped out of the market, all the Altcoins in the market right now are incurring losses between the range of ~5 to 15% with Ethereum, possibly the most stable Altcoin, incurring a loss of 17.09%.
As the prices of these coins slip further and further down, the market capitalisation of the cryptocurrency market right now, for the first time in the past nine months has sunk below the $210 billion dollars mark and is currently at $191 billion dollars.
Why is Ethereum Falling?
For the first time since November Ethereum, the world’s second largest cryptocurrency, has gone below the $300 USD mark and is further plummeting from $264 USD. The altcoin is deemed as one of the most stable altcoins and has major support from the community as it is also a blockchain platform that allows other projects to run on it.
Despite the large amount of community appraisal and the large number of companies that will face a loss because of ETH’s decline, the coin’s value is still plummeting to the ground. The coin has also suffered a close to 28% loss in the last week. while Bitcoin has pretty much held steady at 10% loss.
This fall, however, is not being attributed to the general symptoms of a crashing market. It is, rather, being attributed to the large amount of funds that have been raised on the platform in the name of other projects that are on the platform, running ICOs.
Specialists in the market are blaming Ethereum’s price decline on the fact that there is a surplus of funds in the coffers of startups and small project companies that are now being sold-off because of fund mismanagement. Many officials from hedge funds and Ethereum platforms have come out and said that this mass-sell off of funds that have been raised during the ICO process is a direct indication of how startups that run ICOs on the platform are inexperienced with how to handle their funds and how they are adding to the fragility of the market when it is already on thin ice.
Why are the Altcoins Bleeding?
As to the answer of the question of why the altcoins are bleeding right now, remains speculative, because there is no apparent cause as to why there was a $20 million dollar dump over this week.
However, one of the most plausible reasons for this decline in the market right now could be because of the technical correction that the market is undergoing right now post price surges on 18th of June. The market’s technical correction is the most apparent reason for the altcoin prices’ decline.
Further, many investors and specialists in the market are convinced that if this downward trend continues and Bitcoin does, in fact, fall below the all-so-important safety line of $5,800 USD, it really might be game-over for the market. But on the bright side, the cryptocurrency market has recovered from worse and it may just see gains again after the market correction is complete.
The Silver Lining
Every cloud has its silver lining and this massive storm cloud is no exception. With the large amount of instability in altcoins prices and trends,people are clinging on to Bitcoin more because of its apparent stability throughout this crisis.
Owing to this reason, Bitcoin’s market dominance is up to 50% now and is only expected to go up with times if the altcoins’ downward trend continues.
But whether this trend is here to stay or is just a blip in the market’s story remains to be seen and the next forty-eight to seventy-two hours will be the deciding hours that determine what the cryptocurrency trend lines for the next quarter are going to look like.
Also, read: Top 6 Crypto Trading Strategies
Subscribe to get notified on latest posts.
