A look at the Bitcoin price performance shows that last month was the very worst in 7 years for the coin in terms of losses when viewed in the light of the coin’s history. The recent losses saw the dominant coin lose 40 percent of its value in the month of November.
Everyone knows about the volatility of Bitcoin. In fact, there are many people who live on it making huge profits through speculation effectively riding on the back of the bull and waiting for the bear to drop dead before jumping on the back of the next bull.
November Bitcoin crash expectedly pulled the market down to its yearly low. The coin which at the beginning of the month was trading at $6500 but ended the month at $4,280 shedding more than a third of its value.
45 Percent Loss in A Month
Data from Coinmarketcap shows that the last time Bitcoin shed as much value within a space of one month was in April 2011 when the coin lost 39 percent. A comparative analysis shows that the November loss is cumulatively 45 percent.
The coin capitalization also dropped to $74 billion from $113 billion losing $40 billion. The Bitcoin price breakdown gathered momentum immediately the main support point of $5,800 was broken.
Speaking on the breakdown, the CEO of Genesis Global Trading, Michael Moro, told CNBC,
“It’s unclear if this is a ‘bottom’ or a brief period of consolidation before next move down, but buyers are still maintaining some cash on the sidelines in case it does go lower,”
He continued, saying
“While the split occurred on a different blockchain, there were still spill-over effects on other cryptos, including bitcoin,”
in reference to the Bitcoin Cash controversial hard fork that coincided with the market slump.
Altcoins Not Spared in Bitcoin Crash
As expected, most altcoins bled making even more losses than Bitcoin. Ethereum for instance lost more than 50 percent of its value by the time the worst of the slump was over (assuming it is). The coin dropped to $103 from $220.
That Ethereum was among the worst hit didn’t come as a surprise, the coin has had a bad year after most ICO managers sold off their ether hoard to forestall the possibility of losing most of its value in a generally bearish market.
$70 Billion Wiped Out Market Capitalization
The Bitcoin price performance affected the general market effectively wiping out $70 billion in market capitalization in the month of November in less than 10 days.
Data analysis has shown that the coin is repeating a known pattern as seen from the market performance in 2014 and 2015. Inferring from such data, the cycle indicated that the price will be at a bottom range in the next five to six months unless strong fundamental factors act on the market.
This can be gleaned from the recent market performance of most altcoins that have continued to lose value with the outlook of major cryptocurrencies such as Stellar and Bitcoin Cash not looking bright in the short-term.
Consequences of Slow Rebound
Analysts have posited that Bitcoin needs to rebound to $4,200 to $4,400 range after the November drop if the coin wouldn’t plunge further. The expected recovery may now be a long time coming as the coin intermittently has dropped below the $4ooo mark.
According to CCN,
“A technical analyst with an alias ‘The Crypto Monk’ stated that if BTC sustains the $4,000 support level in the next 12 to 24 hours, then a rebound to the $4,200 to $4,400 range is possible. But, if it falls below $4,000, and it was close to doing so earlier in the day, another short-term correction could be in play.”
Bitcoin’s Low Trade Volume
That the daily trade volume of Bitcoin is dropping means that the coin means that the outlook is not too good. Recently, its volume plunged to $5.2 billion from $6 billion validating the short-term trend of lowered sell orders.
The coin that is presently trading at $3,880 December 3 has made several attempts at mini rallies but failed. Botje11 a Trading View analyst agrees that the possibility of a quick rally is remote:
“This doesn’t mean the inverse H&S is completely off the table, but those chances are very low at the moment. A few days ago i gave it 25% now it’s even less. This weekend things were getting a bit confusing though with all that sideways action, where I did not want to see the price getting above the 4200 after making that small H&S but my maximum price was 4300 for my analysis to remain valid.”
The low volume of BTC and the dipping prices shows that the $4000 mark is not sustainable. It is even more likely that the coin will find stability in lower prices than the analyst anticipated. Values as low as $3,200 may give Bitcoin the leverage it needs to rally.
There has been some positive market activity in the stock market as the US and Chinese presidents met on possible trade agreement. The market reaction though positive has not spilled over to the coin market despite boost in the US stock markets.
Some analysts such as Tom Lee have claimed that Bitcoin price movement shows similarities with emerging markets. Alex Kruger added his opinion saying that there is no correlation between the S&P 500 and Bitcoin.
According to the economist,
“As of late, Bitcoin has been positively correlated to the S&P 500. However, short-term correlations are unstable and fluctuate around zero and the 180-day correlation stands at zero.”
There are reports that the coin market considering its high risk is the first target when investors think of exit.
Why do you think that Bitcoin performed this badly in November? Let us know in the comment box below.