Bitcoin, the flagship cryptocurrency, has seen its price suddenly drop yesterday, November 14, taking it below the $6,000 mark. Its slump has been continuing as it’s currently at a new yearly low below the $5,500 mark.
According to CryptoCompare data, the cryptocurrency is currently trading at $5,320 after recovering in the last few hours, although it’s still down over 12% in the last 24-hour period. Its market cap has dipped to $92 billion.
Notably, the recent drop has seen over $25 billion leave the cryptocurrency ecosystem. The fall saw bitcoin’s price dip below a longstanding support slightly under the $6,000 mark that managed to hold numerous times so far this year. This, according to some analysts, could see the cryptocurrency keep on falling, with the $2,500 mark in sight.
Speaking to Bloomberg Stephen Innes, head of trading for Asia Pacific as Oanda Corp, revealed he believes that if bitcoin now loses its support at $5,000, its drop could “open the door to a test of $2,500 as bitcoin retail traders move from buying the drip to full-out panic mode.”
Various experts, including hedge fund manager Brian Kelly, have weighed in on what happened for the cryptocurrency ecosystem to see prices drop so suddenly, especially after an uncharacteristically stable period that saw bitcoin’s volatility index hit lows it hadn’t seen since December of 2016.
Most pointed to the ongoing “fork wars” in the Bitcoin Cash community. As CryptoGlobe covered the community is split into two sides – one supports Bitcoin Cash ABC and the other Bitcoin Cash SV – which have engaged in a hashrate “war.”
The “war” comes as self-proclaimed Satoshi Nakamoto Craig Wright, a BCHSV proponent, has threatened to “kill off” BCHABC by blocking transactions on the network mining empty blocks. This would bring it to a halt, and could see users abandon the project, wait out the attack, or change its proof-of-work algorithm.
The BCHSV side recently revealed it has over 50% of the network’s hashrate on its side, meaning the attack is a real possibility. BCHSV saw its support surge on the announcement, as its pre-fork “futures” on Poloniex saw their price jump to be on par with those of BCHABC. These futures are seen by Wright as a “criminal offence.”
The attack’s possibility is believed to be draining resources from both the BTC and BCH chains. Innes added:
The Bitcoin Cash hard fork is proving far more destabilizing than initially thought as numerous competing factions muddy the landscape.
The drop triggered a widespread cryptocurrency sell-off that hasn’t shown any signs of slowing down. At press time, most top cryptocurrencies are down between 9% and 14%. XRP and BCH are the only ones that have dropped less than 10%.
Ethereum’s ether, EOS, litecoin, dash, and monero have all dropped nearly 14%, as they're trading at $175, $4.54, $42.2, $136, and $85 respectively. Ethereum Classic is seemingly the biggest loser among top cryptos, as it’s down over 16% and is trading at $7.59.