Bitcoin Drops as Crypto Selloff Intensifies

Bitcoin took a tumble on Tuesday, extending losses acquired in the previous day as a selloff in cryptocurrencies intensified across the board.

The world’s largest cryptocurrency declined 11.7 percent to $4,621.0, while Ethereum dropped 13.1 percent to $137.18 and Ripple fell 4.7 percent to $0.45978.

Bitcoin hit a fresh 2018 low earlier in the session, slipping below $4,500, bringing the digital currency’s losses to 30 percent within a week and around 75 percent since peaking in December.

The downturn began this month after a period of relative stability, with prices of Bitcoin trading in the $6,400 range for most of October, a break from its volatility earlier this year, as the rest of global markets sold off.

Analyst Fawad Razaqzada stated that the euphoria has died and price have consolidated with lower lows and lower highs, and that a lot of people have lost interest.

Approximately $40 billion has been taken out the entire cryptocurrency market capitalization in the past week, which was about $172 billion on Monday. Overall market cap of virtual currencies is now below $150 billion, dropping from around $800 billion in January, data from a crypto-industry tracker showed.

Other analysts attributed Bitcoin’s continued sell-off to technical levels and stop orders in the market taking effect after the digital currency stumbled below the $6,000 mark.

As the $5,000 support level did not hold for long, the next logical support level is not until $3,500, according to analyst Mati Greenspan, adding that with all the falling prices lately this fits the definition of a buyers’ market.

Advocates of digital currencies said price volatility is to be expected, and that the need for cryptocurrencies, which operate outside traditional banking processes, will outlast any short-term price declines.

Cryptocurrency Regulatory Crackdown

In addition to a general weakening in investor optimism in the value of digital currencies, traders have also headed for the exit after a regulatory clampdown on cryptocurrency trading earlier this year.

The Securities and Exchange Commission’s (SEC) regulation last week spooked a lot of people, according to Kyle Asman, partner and co-founder of a crypto advisory firm, adding that those who are not sophisticated investors hear SEC and they hit the sell button.

US regulators kept their word about dealing with non- compliant cryptocurrency projects last week, as the SEC announced on Friday its first civil penalties against crypto founders.

The move represents a part of a larger regulatory and legal crackdown that targets abusive and outright fraudulent acts in the growing digital currency industry.

SEC Chairman Jay Clayton stated earlier this year that all cryptocurrencies aside from Bitcoin and Ethereum constitute securities and if it is a security, then they are regulating it.

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