The world’s leading cryptocurrency plummeted to its lowest value in more than a year. The drop came as key volatility indicators hit record low levels. The low volatility was widely touted by crypto experts and analysts as an indication of an imminent price swing.
eToro managing director Iqbal V. Gandham told Express.co.uk BTC’s low volatility was “forming a wedge” which meant “sharp move either up or down” was “imminent”.
The CryptoUK chair, who advised Treasury Select Committee chair Nicky Morgan on her Digital Currencies Inquiry said: “Bitcoin price is forming a wedge, which indicates a sharp move either up or down.”
Mr Gandham’s predictions came to fruition on Wednesday when more than 10 percent of BTC’s value was wiped out over the course of few hours.
As a knock-on effect, the whole cryptocurrency market suffered losses, with other major cryptocurrencies such as Ethereum and bitcoin cash affected.
Bitcoin price crash: Experts have suggested what caused the price fall
Bitcoin price crash: BTC is a volatile asset that sometimes experiences vast swings in value
Cryptocurrency analysts have pointed to specific factors which may have been instrumental in causing the price dip.
Many have referred to the so-called “hard fork” of bitcoin cash, whereby the digital asset will effectively divide in two to form a new cryptocurrency.
Donald Bullers, North American representative for the blockchain firm Elastos, told The Independent: “It’s safe to say that bitcoin cash’s upcoming hard fork stirring uncertainty among crypto investors, and forecasters across crypto and traditional markets alike have predicted a prolonged bear market heading into 2019.
“Crypto investors have proven to be highly reactive to changes across the landscape, and this dip could be the most recent case study of that phenomenon.”
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Bitcoin price news: Overall, bitcoin’s value has increased dramatically since its creation
A “bear” market means the price will continue to fall on a downward trend.
Angel Versetti, CEO of Ambrosus, an Internet-connected sensor firm that utilises blockchain technology, said: “In the first week of November, while the markets for the main large cryptos were flat, bitcoin cash was the only major cryptocurrency shooting up.
“It created strong expectations and pulled the price up, resulting in an outflow of money from other cryptocurrencies.
“However, now a split is looming and the outcome is yet undefined, this has impacted the outflow of money from bitcoin cash.
Bitcoin news: a chart shows the price over the past 48 hours
Bitcoin price crash: bitcoin lost 10 percent of its value in just a few hours
“As people are moving into fiat, cryptocurrencies are taking a fall.”
Although the price of bitcoin has fallen in recent days, overall BTC’s price has increased dramatically since its creation a decade ago.
Bitcoin economist Saifedean Ammous told Express.co.uk the reason for the meteoric rise in BTC’s price was because its supply growth rate is so small.
Dr Ammous argued bitcoin’s low supply growth would soon make it the “hardest money on earth” as existing fiat currencies become less desirable.
Bitcoin price: a chart shows the dramatic price plunge over the course of a week
He said: “That is why in ten years it has appreciated by about 700million percent.”
Since early September, bitcoin had traded in a narrow range between $6,000 (£4,695) and $7,000 (£5,477), following months of steady losses that had seen it fall from a high close to $20,000 (£15,650) in late 2017.
The recent fall in value could be a sign of things to come for BTC.
But despite the crash, some experts have anticipated a price surge over the final weeks of 2018, calling the reduced volatility the “calm before the storm”.
Bitcoin news: BTC could become the ‘hardest money on earth’, Dr Ammous said
Danny Scott, co-founder of crypto exchange CoinCorner, told Express.co.uk bitcoin’s price could reach $15,000 (£11,732) by December.
He said: “If you look at historic trends, November and December typically have been our busier months.
“We are also seeing huge amounts of investment coming through from high net worth individuals and companies buying Bitcoin in high volumes.”