CRYPTOCURRENCY APOCALYPSE CONTINUES AS MARKET CAP DROPS TO $160 BILLION
The price of Bitcoin dropped sharply, marking the eighth day of straight declines. Indeed, the market capitalization of all currencies tracked by CoinMarketCap declined to $160 billion. This was lower than last week’s $220 billion. It is also significantly lower than the peak market valuation of more than $800 billion early this year. For the first time in 2018, the price of Bitcoin declined below $5000.
The decline in the price of cryptocurrencies started last week. This was after the hard fork of Bitcoin Cash, which happened on Thursday. A hard fork is a situation where a new currency is created from another cryptocurrency. A good example of this happened in 2017 when Bitcoin Cash was created from Bitcoin. This time, a hard fork happened regarding Bitcoin Cash after developers and miners disagreed on the future of the currency.
Forking presents a major threat to the cryptocurrency industry because of the dilutive effects that accompany it. In other words, no one will want to own a currency that is likely to be broken down in the future.
News of the hard fork came after the SEC asked Paragon Coin and CarrierEQ to return money to investors. The two companies raised money in 2017 through token sales but failed to register their ICOs as securities. There is a fear that other companies that have raised funds through ICOs will be forced to do the same.
The BTC/USD pair is trading at 4760, which is higher than the intraday low of 4665. As expected, the price is below the major moving averages as shown below. The RSI has fallen to the current 10, and the MACD too has fallen sharply. The decline in these indicators show that the downward momentum could continue.