Is Bitcoin’s Price Drop a Technical Correction?
Cryptocurrency exchange and investment platform eToro is attributing yesterday’s nearly $1000-dollar USD price drop for bitcoin to a technical correction in the market. Though many have differing thoughts on why the price has dropped, most are in agreeance that the hacking of CoinRail, an exchange with a tiny share of the Korean market is not to blame for yesterday’s volatility.
The yellow line on the graph above is a long-term trendline that eToro have been tracking since the start of 2018. The green and red lines mark Bitcoin’s price lows from early April and early February respectively. It appears the market has been trying to break that long-term trendline.
“Though the CoinRail hack may have set us off-track, I don’t think that this will have very significant ramifications in the long run,” said Mati Greenspan, Senior Market Analyst, eToro. “The industry has certainly seen much bigger hacks before and other than a technical price level, this doesn’t change much for the path of the industry over the next five years.”
Greenspan, in his daily update, also pointed out that cryptocurrency infrastructure is under construction and a wave of investment is expected:
“Some very big investors stand ready to enter the market. However, they will most likely wait until an upswing to join in.”
Greenspan believes the big money investors are waiting on the sidelines for emerging cryptocurrency markets to build momentum, but he hedges his bets on whether this will be within a week or a year. It’s a matter of waiting, he says.
Matthew Newton, another analyst at eToro, also comments on the relationship between Bitcoin’s price fall and the CoinRail hack.
“The hack in South Korea may have fired the starting gun on yesterday’s price drop. But the major fall happened later on that afternoon, around 6pm BST, when there was a surge in volume as potentially a large sell order was dumped on the market. Currently there is no indication of what caused this, but it certainly seems to have accelerated the drop.”
Newton believes the cryptocurrency markets are showing signs of maturity and promise amidst institutional interest and the formation of strong communities of graduates and entrepreneurs looking to get into blockchain.
“Recent institutional interest should continue to develop as they educate themselves about the market.”
Bitcoin’s fall in price also coincided with the EOS blockchain main net launch. Though EOS saw minor gains beforehand. its price also declined substantially, as with most other altcoins seemingly forever tied to Bitcoin’s performance.