Bitcoin tumbled below US$6 000 for the first time since August and reached the lowest level in over a year, breaking the recent stretch of tranquility exhibited by the notoriously volatile digital alternative to cash.
The world’s largest cryptocurrency tumbled as much as 11%, with most of the loss coming within a half-hour window. Other digital coins slumped, with smaller rivals ether, litecoin and XRP dropping more than 17%. Bitcoin cash tumbled as much as 21% as the bitcoin offshoot faces its own split.
“The market is trying to find the bottom,” said Michael Terpin, a San Juan, Puerto Rico-based partner at Alphabit Fund. “People who are chartists look at historical patterns, and they note there’s one last final capitulation drop to get the last people fleeing out of the market.”
Some traders speculated that investors may be leaving bitcoin to raise funds to buy bitcoin cash after it splits in anticipation that each of the new coins will appreciate.
Bitcoin dropped as low as $5 549, the least since October 2017, or just before the surge in demand that pushed its price to almost $20 000 in December. It’s down about 70% from that record high in the 10-year-old token.
When it split off a year ago, bitcoin cash jump-started the forking craze in which dozens of software development teams sought to create money out of thin air by tweaking the original computer code and releasing coins with “bitcoin” in their names.
A group headed by Craig Wright is expected to take control tomorrow of the world’s fourth largest cryptocurrency following a software upgrade. A rival faction that disagrees on how to best expand has been trying to persuade the community of computer operators running the network to adopt their version. About 70% of the so-called miners that process the transactions that keep the network afloat are signalling they support the version backed by Wright’s allies, according to crypto data tracker Coin Dance. — Reported by Olga Kharif, (c) 2018 Bloomberg LP