Bitcoin Falls Below $7,000, Cryptos Retreat Amid Global Trade War Fears

  • Most cryptocurrencies are falling for the day, with bitcoin sliding below $7,000
  • This as fears of a global trade war keep growing with Trump and China going head on

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."

Mati Greenspan

Billionaire Novogratz: Altcoins Won't Pump Like In 2017 Bull Run, Bitcoin Will Dominate

It appears that cryptocurrency prices have finally begun to recover after enduring an extended bear market which lasted throughout 2018.

As the market capitalization of Bitcoin (BTC) and other major cryptoassets continues to rise, several analysts have been drawing comparisons between what they’re seeing in the current market and what they observed during the historic bull market of late 2017 and early 2018.

Commenting on the recent crypto market price movements via Twitter, Ran NeuNer, the host of the CNBC Africa Trader show, remarked:

The market is running but we still haven’t seen the crazy alt pumps, pumps where coins do 40% in a it coming?

Bitcoin To “Outperform” All Other Cryptos “This Time”

As the bitcoin price begins to recover, there have been many predictions made regarding the anticipated performance of altcoins. Twitter user “Crypto Bitlord” (@Crypto_Bitlord), a widely-followed digital asset market analyst, believes XRP, which currently has a market cap of around $16.3 billion, may trade as high as $10.

However, prominent crypto investor Michael Novogratz believes that digital asset traders are a lot smarter this time, when compared to some of the bad investment decisions they might have made during the initial coin offering (ICO) craze of 2017.

Novogratz, who’s the founder and CEO of Galaxy Digital, a full-service crypto merchant bank, has predicted that in this market run, Bitcoin will “outperform” all other cryptoassets.

On May 16th, 2019, the Bitcoin price surged to a 2019 high of $8,373 according to CryptoCompare data. In response to bitcoin’s recent price movements, Juan Villaverde, the Chief Analyst at Weiss Crypto Ratings, told CryptoGlobe: 

Bitcoin could fall to as low as $4,400. But [if] it does, it will be the best Bitcoin buying opportunity since 2015.

“More Good News For New Bitcoin Users”

Villaverde, an econometrician and mathematician focused on developing various crypto index models at Weiss Ratings, believes bitcoin would be a great buy at a lower price (as suggested above) because of the following reasons:

  • “The usage of Bitcoin is near all-time highs – 450,000 transactions per day. That’s up from a low of 150,000 in April of 2018 and approaching the all-time high of 490,000 in December of 2017.”
  • “Despite the high transaction volume, fees on the Bitcoin network are at their lowest levels since August of 2017 – more good news for users.”
  • “The Bitcoin block size is now greater than ever before, thanks to the Segwit technology upgrade.”

Villaverde further noted that the predictions are “based on studying the time patterns in Bitcoin's rises and falls throughout its 9 year trading history.” He explained that the time patterns have been analyzed by using an “algorithm-based market cycles model.”

The Chief Analyst at Weiss Ratings also mentioned that the bear market “ended on December 15th 2018 and the model confirmed this shift in trend on March 26th of this year.”

He added:

Then, after the rally that took place starting on April 25th, the same model told me a new bull market was now underway. The same model indicated a 30% to 45% correction due as of late April-early May and we seem to be experiencing that right now.