Bitcoin price was trading down with hefty losses of 15% to a low of $5430 in the late part of Wednesday. What is the catalyst behind the price drop? Will it continue to drop further?
November 15, OctaFX – Since September, the price of Bitcoin has mostly been stable. The volatility reduced in what many experts believed was the calm before the storm. The storm came yesterday, when Bitcoin had the sharpest decline since February this year.
The price declined by more than 15% to a low of $5430. Bitcoin’s price has dropped by more than 70% from the YTD high. Other cryptocurrencies like Ether, Litecoin, and Ripple dropped by more than 15% as well.
Bitcoin Cash Forking: The Catalyst Behind Price Drop
The decline that happened overnight was associated with a new Bitcoin Cash fork. Many Bitcoin holders sold their holdings as they tried to raise cash to buy Bitcoin Cash when it splits. They anticipate that the value of the new coins will increase.
When the split happens, the two new Bitcoin Cash will become competitors. In addition, the process of mining the new currency will be relatively easy before the hash rates increases.
Last year, Bitcoin Cash was created by the forking of Bitcoin. This led to a new forking craze in which a number of software development teams started creating new money by changing the original computer code. After the forking happens today, Bitcoin Cash will be led by Craig Wright while another rival faction will lead the new version of Bitcoin Cash.
Bloomberg Intelligence Warnings
All these issues raise serious concerns about the relevance of the cryptocurrency world with investors worrying what will happen if the forking craze continues. In other words, they are concerned about the value of their currencies when a new one is created.
Bitcoin’s current price is the lowest it has been since last year. In an article last week, Bloomberg Intelligence warned that declines below $5900 could see the price drop to $2000.
Will Bitcoin Price Continue to Drop?
The BTCUSD pair’s current price is below all the main moving averages while the RSI is currently at 10. While this could be viewed as a sign to buy, the low RSI is also an indicator of how strong the bearish momentum is.
Therefore, the pair could remain within these levels or even fall lower as forking happens.
This article was provided by OctaFX. It should NOT substitute for professional marketing consulting. Forex margin trading involves substantial risks. Forex margin trading exposes participants to risks including, but not limited to, changes in political conditions, economic factors, and other factors. All of which may substantially affect the price or availability of one or more foreign currencies.