By Shelly Melancon (Switzerland)
The value of Bitcoin has retraced, shedding over $6,000 in 24 hours while Ethereum declined below $4,000. The tottering cryptocurrency market made the most valuable digital asset to decline in value after a few days of an upside trend. Similarly, the values of digital assets on the crypto market as well have toed the downside trend of Bitcoin as nearly $200 billion were erased from the entire market cap.
This retrace followed closely after Bitcoin clinched a new high at $59,600 within 3 weeks. At the time of this writing, the price sits at a low of $54,717 with a total market cap of $1.04 trillion. Bitcoin on Friday 7th of May gained from $55k to over $59k high by Saturday before the decline that began on May 10th to drop below $55k today. Other altcoins have witnessed similar retraces as Dogecoin dropped from trading at 66 cents to below 50 cents in three days.
Why is Bitcoin Retracing?
As concerns over the reason for the $6k crash continues to surmount, other analysts believe that it is a positive sign that intends to shed off the massive influence that Bitcoin has been maintaining over altcoins. This opinion points in respect to Ethereum that has been comfortably riding a little above $4,000 before declining to a low at $3,800.
Also read:Although cryptocurrencies have a reputation for their natural volatility and have seen similar declines in times past, it is speculated that the entire cryptocurrency market has experienced quite a bullish run this year and would be setting the bears in a little to cool the run.
Despite that Bitcoin spiked up and regained a few thousand dollars, the value of BTC still stays down about 6% on the 24-hour chart. In furtherance, the market dominance that Bitcoin exerts continues to fade away as it is now reduced below 43%.
Nevertheless, the entire cryptocurrency remains optimistic to see the value of the coin step up again as indicators are pointing to signs of a limited bull.
What Events are to be Expected Next?
It is unclear what the future would hold for the cryptocurrency – this could be the beginning of a huge recovery to return Bitcoin to high records again or still the start of a bear market.
Recall that JPMorgan strategists in an email report by Bloomberg told clients a few weeks ago, “over the past few days Bitcoin futures markets experienced a steep liquidation similarly to the middle of last February, middle of last January or the end of last November.”
The strategists maintained that given the elevated level, momentum signals will naturally decay for several months.
However, despite the recent crash Bitcoin has witnessed great bull runs this year. Even at its present value, Bitcoin maintains a stand at a price level almost twice its value as at last year with a percentage increase of about 700%.
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