On the day when Bitcoin Cash had its highly anticipated hard fork take place, the crypto market faced a large correction and lost around $27 bln. For the past two days, this retracement has continued, making overall losses even bigger.
Bitcoin Cash has also lost around 8 percent, even if one puts together the value of the two new assets (Bitcoin Cash SV and Bitcoin Cash ABC). Following the chain split, the rate of Bitcoin ABC (BCHABC) — the initial BCH network — decreased by over 15 percent, dropping to $250.
Will Bitcoin roll down to $4,800?
On Friday, news outlets reported that a crypto trader also working with technical analysis, Crypto Rand, assumed that Bitcoin sees a growing risk of diving to $4,800 - $5,000. He added that technical indicators are not showing any signs of reaching a bottom at the moment. However, Crypto Rand bets on $4,800 as the bottom for BTC.
Even though the rates of other coins from the top-ten list as well as altcoins have begun to move independently, leaving its correlation with BTC, if Bitcoin drops to the aforementioned low, this will most likely lead to the rest of the market making an intensive downward move, too. At present, the volume of daily BTC trading is holding at around $5 bln. To compare, XRP, BCH, and XLM are showing trading volumes between $100 mln to $800 bln. That is 16 percent lower that this value for BTC.
Earlier this week, prominent blockchain investor Josh Rager mentioned that according to technical indicators, it is only a question of time until BTC rushes down to $4,900. However, the coin may bounce upwards from the support levels of $4,300 - $4,600.
The SEC makes it worse
This week, the overall sentiment in the crypto market has been negative due to the market collapse. However, things also look bad for small crypto and tokens, since the US SEC has been intensively investigating coin offerings from startups. This could cause investors to lose their confidence in the industry, but analysts believe this would be only for a short term.
Since the SEC has made Paragon and AirFox give back the raised funds to investors and forced it to pay an extra $350,000 as a fine, experts reckon that investors may well stop putting their money in token offerings until the regulators come up with permanent legal rules.