Crypto prices are in free fall, with the market crashing twice in just two weeks. The big question on many investors' and traders' minds is, is this the end for crypto?
Last week, the cryptocurrency market capitalization dropped by $26 billion in just 24 hours.
Bitcoin (BTC) fell over 11% in just 12 hours, plummeting through the $6,000 major support and hitting a one year low of $4,700, and the crypto’s market cap fell below $100 billion for the first time since October 2017. This is nearly a 75% drop from December 2017’s all-time high of nearly $20,000. On the same day, Ethereum posted a 10.5% loss as it fell to a 16-month low of just $163 – down over 80% from it’s January high of $1,412.
In the last 24 hours, things have gotten worse, with Bitcoin plummeting from $5,300 to $4,500 – a drop of more than 17% – and its total market cap has fallen to just $80 billion. Meanwhile, Ethereum fell to $133 – down 17% in 24 hours and 33% in a single week.
If we look at the market as a whole, no crypto is safe:
The total cryptocurrency market capitalization is now down to $152 billion – it lowest since October 2017.
On CNBC’s ‘Fast Money’, BKCM founder and CEO Brian Kelly said the crash was triggered by Bitcoin Cash’s hard fork upgrade. However, there is a range of factors contributing to this year’s market volatility:
Ultimately, the hard fork upgrade might have been the trigger, but it was just one domino in a chain of factors contributing to investor pessimism.
The big question on many investors’ and traders’ minds is, is this the end for crypto?
If the negative sentiment from 2018 continues into 2019, it wouldn’t be surprising for the crypto market to bottom out in the first half of the new year. However, some commentators are already predicting a turnaround, arguing that the US midterms and US debt could help the market rally towards the end of the year.
In any case, it is an exciting time to be trading!
The good news is that market volatility provides a range of trading opportunities. And, when trading CFDs on crypto cross pairs and cryptos paired with fiat currencies, traders can profit on market movements in any direction.
A trader who opened a short trade on just one lot of BTC/USD, with a leverage of 1:5, opening before the market fell at $6,189 and closing at the low of $5,300 would have made $889.
Keep in mind that, while volatility does increase opportunity, it also increases risk. For this reason, it’s important to have a risk management strategy in place before embarking on any trade.
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FX Empire editorial team consists of professional analysts with a combined experience of over 45 years in the financial markets, spanning various fields including the equity, forex, commodities, futures and cryptocurrencies markets.