Bitcoin, world’s best-known digital coin plummeted to its lowest this year on Tuesday, as the bitcoin price drops sharply to $4,300, taking losses of 25 percent within a week.
With crashing down of the broader cryptocurrency, other smaller coins slumped sharply, gathering steam among market makers and traders who blamed bitcoin’s slide on heavy selling at leveraged Asian exchanges including Bitmex and OKEx.
A steep fall followed a sudden plunge, shaking Bitcoin out of its relatively stable period, where the prices were maintaining a $6,500 mark for several months. On Tuesday, Bitcoin’s prices fell as low as $4,327, it lowest since October last year, while its mid-afternoon trading recorded around $4,750 on the Bitstamp exchange.
According to Mati Greenspan, eToro’s senior market analyst, the break-out was most likely to happen; as the prices move so steadily, it builds up lots of stop-loss orders which are now being liquidated. Ripple’s XRP XRP=BTSP, the second largest coin fell 14 percent, while the third largest Ethereum’s ether ETH=BTSP dropped 16 percent, before clawing back their losses in the U.S. trading hours.
As reported in Reuters, the cryptocurrency’s falls on Tuesday coincided with broader plunges in financial markets. European shares crashed due to poor retail sales while the Wall Street was dragged down by Apple’s weakness.
This year, Bitcoin has tumbled over 75 percent, following its peak of $20,000 marked in December 2017 with largest number of retail investors in the history. Michael Moro, Genesis Global Trading’s CEO said that the presence of leveraged exchanges in Asian markets is attracting the traders. People who are risking 100X type of leverage cannot be considered as an investment, it’s a casino mentality, he added.
Bitcoin’s price tends to be sensitive to debates over the evolution of its underlying network, Reuters reported. Last year suspension of hard forked formulated by investors and major developers proved a major catalyst to its groundbreaking rise.
Mainstream investors, however, have stayed clear of the bitcoin due to concerns over inadequate regulatory oversight and frequent swings in price along with underdeveloped market infrastructure. It’s usage as currency for payment has shrunk this year, Reuters reported.