Bit-comment: Bitcoin’s Black Monday

It’s Black Monday for Bitcoin. The benchmark cryptocurrency has dropped by 9% during the last 24 hours, touched 6500 earlier this morning. The altcoin market feels even worse. If prices remain at current levels, we may see a chain reaction from miners, who may start to shut down their ASICs. Along with the decline of the Bitcoin price, the trading volumes have grown significantly up to $43 bln, which is an extremely bearish impulse for the market.

Practice shows that China can be both an engine of growth and its anchor. At first, the crypto community was happy to digest the news about China’s course on blockchain, making its unfounded conclusions that the cryptocurrencies will come to China together with blockchain. Then the community ignored the denials of Chinese officials. Finally, the rumours of Chinese police raids against the cryptocurrency exchanges led to a sale-off. It coincided with the growth of the popularity of delivery futures on Bakkt. On November 22, when the first impulse of the Bitcoin collapse occurred, the daily trading volume on the Bakkt platform was $20.3 million, which is a record value for the company. Crypto-enthusiasts would like to believe that the growth of popularity among institutional investors can lead not only to market collapses but more often, the reality often shows the opposite.

The FxPro Analyst Team