Bitcoin Falls Below $5000, Other Cryptocurrencies Plunge As Well

The price of bitcoin began tumbling Thursday when it fell below the $6,000 mark, and its slide has continued since. It dropped below the $5000 mark — its lowest in over a year — Monday at 2:10 p.m. EST, falling to a low of below $4,800. The last time bitcoin had sunk this low was in October 2017. It recovered somewhat later in the day, and was trading at $4,998 at 10:12 p.m, EST, as tracked by tradingview.

While bitcoin saw a dip of over 11 percent in 24 hours trade, bitcoin cash — which has been creating uncertainty surrounding the hard fork — slumped by 40 percent in the same duration. Other currencies that have had a double-digit fall (more than 10 percent) in 24 hours included ethereum, cardano, and monero.

Speculation about reasons behind the price drop include various reasons, such as regulatory scrutiny, bitcoin cash hard fork, reduced market interest in cryptocurrencies, as well as a technical break out. Some people in the crypto community believe this fall is associated with panic selling and that now is, in fact, the best time to buy bitcoin. For those already invested, they should hold on to their assets and wait for prices to rise.

Jeremy Gardner, a cryptocurrency entrepreneur and a self-made millionaire through his early investments in bitcoin, has faith in the crypto technology.

"Predicting the short-term price of bitcoin is an exercise in futility. These are sentiment-driven markets, and sentiment can change on a whim. What matters is the overall direction of the technology, which is clearly forwards," Gardner told International Business Times.

Daniel Schwartzkopff, CEO of Invictus Capital cryptocurrency investment firm, opined that the reason for the fall could be the on-going bitcoin cash "civil war" that has caused widespread damage to the market.

"Both groups [Roger Ver and Bitmain's bitcoin cash ABC and Craig Wright and Calvin Ayre's bitcoin cash SV chain] have large war chests of bitcoin and are selling it on the market to subsidize the unsustainable mining of their individual chains — i.e., the expenses currently far exceed the revenues made by mining their new chains. Hash rate is being rented, paid for with the bitcoin being sold, in order to secure the longest chain and be declared the winner of the original bitcoin cash ticker symbol," Schwartzkopff explained to IBT.

The uncertainty behind this could have caused panic among investors. The CEO also predicted that the as long as the uncertainty continues, bitcoin price is likely to fall further. "Bitcoin price has historically not sustained levels below the cost of mining," Schwartzkopff added.

Talking about theories that could have triggered the big sell-off, David Thomas, director and cofounder of GlobalBlock, told IBT: "Bitcoin had been trading in an ever tighter range for a prolonged period of time and it was inevitable at some point that a break would come. Bitcoin has spent the majority of 2018 in the doldrums and critics are now starting to question the overall interest in the industry. As the year has progressed volumes have fallen away and some are arguing that the adoption of cryptocurrencies has stalled."

Analysts feel there is more depression to come in cryptocurrency prices this week, which is going to be important for the crypto community and more specifically, for bitcoin.

"Simply speaking, the manner and way in which bitcoin moved in its big rally last year means that it very quickly eclipsed its current market price and also from May 2017 it’s easy to forget but bitcoin was trading at $600 and below. This means that there isn’t a whole lot of data to look at from around $600 and upwards as it happened in a relatively quick time period. If pushed, you could say that $3,700 and then $1,900 could potentially be levels to note but other than that we shall just have to wait and see," Thomas added.