Things are looking pretty grim in the crypto sphere right now! Bitcoin has dropped from $6,500 to a low of around $3,450.
As of writing this article bitcoin is now at $4,166, so it bounced a little from the support level at $3,600.
I’m still nervous though. This price decrease was caused largely by a hash war on the bitcoin cash hard fork, which has no end in sight.
Basically, bitcoin cash split into two different coins. They’re currently fighting to see which version becomes the primary, default coin everyone invests in.
Both sides have vowed to do whatever is necessary to bring the other down, even if it means trashing the whole market in the meantime.
They have the capability to do it too. On one side of the war is mining giant Bitmain, which produces the majority of cryptocurrency mining machines for the world.
On the other side of the war there’s an online gambling mogul Calvin Ayre, worth over $1.5 billion.
With those kinds of backers, I don’t see this hash war ending any time soon.
There are other factors at play as well. As the hash war hit the trading network, it shook out all the weak hands and those that wanted a quick profit.
Bitcoin has been in a bear market for a long time now. Short to mid-term investors were already losing patience, and then the market broke the key $6,500 support level.
Once that happened, those investors all left, driving the price down further. Then long term investors who got into bitcoin back when it was at $4,000 the first time saw their profits eliminated.
Some of them probably left too.
All of this snowballed into bitcoin testing $3,450 for the first time since September of 2017.
This massive drop shoved the entire crypto space down and caused rippling effects everywhere in crypto.
No one knows. Anyone that tells you they do know is lying.
The hash war will bring continued instability to the cryptocurrency market. I can’t see things recovering fully until it’s over.
My plan is to wait this out with the perspective that it may very well take 6 months or a year for one side of the bitcoin cash war to concede defeat.
My hope is that we’ll get lucky and have that happen sooner though. It’s possible this ends in weeks, not months. There’s no way to predict it.
As it stands though I’d be wary.
So far I’ve counted at least three fake bull recovery traps set up and executed in the bitcoin market. I see no reason there wouldn’t be more with the current uncertainty in the market.
Things are looking bad, but the fundamentals haven’t changed. I believe the market will recover, it will just take time.
Hang in there crypto bros, it’s always darkest before the dawn!
Will Salisbury is the co-founder of Blockchain Decrypted and full-time cryptocurrency trader. He also hosts the Blockchain Decrypted podcast, and when he's not talking or writing about blockchain technology and cryptos, he likes to play games and relax in his home state of Michigan.
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