Bitcoin drops to year low as slump persists, ethereum down sharply

A cryptocurrency mining computer is seen in front of bitcoin logo during the annual Computex computer exhibition in Taipei, Taiwan June 5, 2018. — Reuters pic

NEW YORK, Nov 15 — Bitcoin fell to a more than one year low yesterday, breaching a key support level of US$6,000 (RM25,144) and causing a wave of selling in the digital currency and other crypto assets in what has been a prolonged market slump that began early this year.

Bitcoin fell to as low as US$5,533.09 on the Bitstamp platform. It was down 9 per cent at US$5,690.47.

“For the last few days you could see the consolidation happening and the price was moving on the downside,” said Naeem Aslam, analyst at ThinkMarkets, a multi-asset online brokerage.

“The break of US$6,200 yesterday gave a fair indication that there are no buyers on the sidelines at this point,” he added.

Bitcoin’s weakness spread to other cryptocurrencies, with ethereum, the second-largest, dropping to a two-month low. Ethereum was last down 10 per cent at US$182.41.

Yesterday’s selloff in cryptocurrencies pushed the sector’s market capitalisation to under US$200 billion for the first time since around mid-September, according to data from industry data tracker coinmarketcap.com.

“What you are seeing… is a breakout on the downside. Sometimes when things happen, it takes a while for the true reason to become clear — an exchange trade or regulatory action,” said Charlie Hayter, founder of industry website Cryptocompare in London.

Other market participants suggested that today’s impending “hard fork,” or split of bitcoin cash — another cryptocurrency that emerged out of bitcoin — into two separate currencies, has caused some volatility as well.

Twice a year, bitcoin cash undergoes scheduled protocol upgrades, which include splitting its network.

“For our trading activities, the hard fork recently has generated tremendous interest and trading volume, above four billion daily, among traders,” said Ricky Li, co-founder of crypto trading and advisory firm Altonomy.

Overall, analysts said the outlook for bitcoin remains unclear, with longer-term forecasts dependent on the virtual currency becoming a reliable store of value or a viable payment mechanism.

However, there are growing signs of greater institutional participation in bitcoin, such as increased demand for a bitcoin exchange traded fund and rising bitcoin futures volume, analysts said. But they noted that actual participation remains low among both institutional and retail investors. — Reuters

Original Source