Bitcoin is currently down to its lowest level since October 2017, but Brian Kelly of BKCM LLC says the drop is only temporary. The cryptocurrency market also lost $25 billion in a day of massive losses for almost the entire market.
Concerns Over Bitcoin Cash Hard Fork
Wednesday, November 14th, saw Bitcoin plummet by more than 11 percent to set a new 2018 low at $5,600. Speaking to CNBC, Kelly identified the ongoing civil war within the Bitcoin Cash community over the upcoming hard fork as the reason for the selloff. Commenting on the matter, Kelly said:
When you do a software upgrade, everybody usually agrees. But in this particular case, everybody is not agreeing, so, we’ve got ourselves a ‘crypto civil war. People started selling. That triggered stops. Everybody got concerned.
Despite the sudden drop, Kelly says the situation is only temporary, even stating that his company “bought the dip.” Echoing Kelly’s statements, the Coinshares CSO, Meltem Demirors, said hard forks usually cause sudden changes in the market’s price action.
According to Demirors, the uncertainty over the Bitcoin Cash hard fork saga is pushing many to reduce their risk exposure. The spike in sell orders likely triggered the broader market to go into a selling frenzy.
Like Kelly, Demirors doesn’t believe the selloff is fatal for Bitcoin. The Coinshares CSO highlighted a slew of upcoming positive developments likely to improve the situation. However, Demirors did point out that the present situation could spell doom for many projects given the contracting liquidity. Many ICO projects already in tenuous positions before the drop might have some tough choices to make if this bear breakout persists.
$25 Billion Wipeout
The plummet itself saw Bitcoin fall below the $6,000 psychological support level for only the second time in 2018. The BTC price has previously tested this level on multiple occasions, bouncing back but to consecutively lower highs. BTC’s market capitalization is also below $100 billion for the first time since October 2017.
Wednesday’s price rout saw the total market capitalization shed $25 billion. Presently, the market is down by almost 80 percent from its high of $820 billion at the start of the year. In the altcoin market, ETH failed to stay above its $200 psychological price level, losing its second spot to XRP.
Will the Bitcoin price test $5,000 before any rebound? What is your end of year price forecast for BTC? Let us know your thoughts in the comment section below.
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