Bitcoin has reached a new all-time long, having dropped over 10% in the last 24 hours. The token, which was hovering around $6300 USD for the last month has been knocked back to $5682 USD, at the time of writing.
The dip is blatant when we measure the past week against the past day in the charts.
Charles Bovaird pointed out in a Forbes article that the most plausible reason for the massive downward spike can be attributed to the impending Bitcoin Cash hardfork and all of the controversy which surrounds it.
Bitcoin Cash “splits’ every six months in a scheduled upgrade which forks the token. As explained, usually, this hits no resistance and runs smoothly. This time, the direction in which the new fork should go is the key debate and is stirring up a great deal of angst in the market. Not only are investors uncertain which direction to take – a choice which was not predicted to have to be made – there are traders who are hoping to get both Bitcoin Cash ABC and Bitcoin Cash SV tokens out of the contentious split.
Cryptocurrency figures and uncertainty
Mati Greenspan, the senior market analyst of eToro, commented on the matter to Business Insider saying:
“The end result will most likely be a split in the network resulting in two different versions of Bitcoin Cash when both upgrades go into effect this Thursday.”
Joshua Frank, a cryptocurrency analytics expert also commented:
“There is a tremendous amount of FUD surrounding the Bitcoin Cash hard fork… It seems like there is a lot of confusion in the market as to what is driving price and who will emerge as the winner in the BCHABC vs. BCHSV fight… We have seen this FUD and confusion in Twitter conversations. This is reflected by the fact that Bitcoin Cash has had sentiment volatility three times higher than any other major cryptocurrency over the last 24 hours and BCH’s tweet volume is 217% higher than its 20 day moving average… With the uncertainty expressed by crypto traders on Twitter, both the short and long-term sentiment of Bitcoin Cash remain negative. It will be interesting to see how the sentiment of BCHABC vs. BCHSV as well as miner adoption play out over the next 48 hours. We anticipate this having a strong impact on future price movement.”
CNBC Cryptotrader Ran Neuner also commented as the dip was starting:
What did I miss? pic.twitter.com/CaxiBYBkUu
— Ran NeuNer (@cryptomanran) November 14, 2018
Although we have seen a regular pattern emerge recently, cryptocurrency is still a volatile industry – and this spike is proof of it. This might be over-all beneficial to cryptocurrency as it might trim off the excess traders before it is able to bounce back stronger, or it might sink the token further into the red.
As with any cryptocurrency advice, proceed with caution. Trade safe and trade smart.