Bitcoin, Ethereum Litecoin and other cryptocurrencies have been enduring a bear market for months. Earlier this week, bitcoin and ethereum, the two biggest cryptocurrencies by market cap, failed to rally beyond the $7,500 and $450 marks respectively. At press time, Bitcoin is trading at $6,970 while Ethereum is at $375.
Bitcoin, according to analyst Phantom Strategies, needed to breach the $7,500 mark to establish a strong base to continue. Wednesday morning most cryptocurrencies started rallying, although their gains culminated in retreat – previously regained ground was once again lost
Tariffs and Trade War
Some of the worst affected cryptocurrencies, at press time, are NEO and Litecoin, as both lost about 11 percent of their value in the last 24-hour period. Their losses were followed by those of Stellar and Dash as both are down by nearly 10 percent. The current landscape between China and the US is taking its toll on global markets, and may be affecting cryptocurrencies as well.
The tit-for-tat exchanges on trade tariffs between both the US and China continue to create a fragile environment for investors. China has recently retaliated against the US’ protectionist policy with tariffs on over 128 American imports. This, combined with other events, led to significant sell-offs within US indexes.
According to CNBC, Bitcoin has suffered one of its worst quarters ever this year, as it saw the flagship cryptocurrency lose over $119 billion. Ripple (XRP) has has also seen its value go down in what is being considered its worst starting quarter. The token fell by 77 percent over this year’s first few months..
Recent charges brought before Centra Tech, an ICO endorsed by popular celebrities like legendary boxer Floyd Mayweather and artist DJ Khaled, may have contributed to the market’s decline.
However, according to Mati Greenspan, a senior market analyst at eToro, drop may not be related to the trade war. He said:
“I think that there is a big connection in the way that people are managing their portfolios and the cryptocurrencies have been increasingly correlated with the stock markets especially in the last few weeks. This as more and more brokers add bitcoin, the liquidity bridges are being built.”