Cryptocurrency markets trip and fall, bitcoin drops 10%
Prices are stumbling after weeks of recent gains. Will they plummet again or recover?
Cryptocurrency markets have taken a gentle hammering over the last 24 hours, with bitcoin shedding about 8% before turning upwards again, according to LiveCoinWatch. Most altcoins are faring much worse, with double-digit 24-hour losses being the norm. This punctuates the precedented bull run of the last few weeks and seems to show traders taking gains while they can.
Bitcoin made it to $9,700 before stumbling, falling short of the oft-considered $10,000 benchmark. The $10,000 mark is widely regarded as the signal that made the general public say "woah" on bitcoin's late-2017 meteoric rise, and it has been considered a significant marker in other ways. Bitcoin made it above $10,000 a couple of times in the February bounceback but had a lot of trouble maintaining it.
However, at the time of writing, markets have made a pronounced upwards shift once again and might continue bouncing upwards. Or they might not.
As usual, the largest slumps were the coins which had seen the biggest gains recently. IOTA saw one of the more distinct drops, dropping about 20% over several hours, from US$2.20 to about US$1.75. It has since started bouncing back and has been living in the US$1.80 to US$1.95 range over the last hour at the time of writing. This is probably because traders had a lot to cash in from IOTA's price rises over the last few weeks, with anticipation seeing its prices double to $2, and a significant IOTA presentation at Hannover Messe, from its partners at Fujitsu and other companies, pushing it beyond that.
Ethereum also dropped substantially, and neatly plummeted from $700 to $600, before recovering somewhat higher. This was also following especially pronounced gains of about 30% in the last week, and a rough doubling from Ethereum's time in the $300 range.
Will the markets fall down or continue to go up?
At a glance, the stumbling prices look like a fairly natural readjustment as traders cash in their recent gains. Prices get increasingly fragile the longer an unbroken rise continues, and following the recent lows, it's safe to say the traders are feeling paranoid right now and don't want to get caught in another downswing. This alone might be enough to erase the recent gains of the last few weeks.
On the other hand, the bitcoin bellwether is looking relatively strong. The biggest drops are in the altcoin market, and by its usual standards bitcoin is looking relatively stable. Some of the less conventional signals, like coin age and "HODL waves," are also pointing at markets being on track for a relatively steady rise.
The distribution of bitcoin coin age over the last month shows a lot of consolidation over the crash in recent months, and generally points at BTC's artificial scarcity increasing quite nicely, driving prices upwards over time as intended.
Unscientific analysis suggests that the current stumbles will just be a blip in a period of continued rises, but there's always the possibility of stumbles turning into falls.
Disclosure: At the time of writing the author holds ETH, IOTA, ICX, VEN, XLM, BTC, NANO