Cryptocurrency Market Recovering After Massive Correction
The cryptocurrency market is getting back on its feet after a brutal day yesterday. The majority of coins have risen by 10-20% over the last 24 hours after more than a 30% fall on Friday, Dec.22.
The total digital currency market capitalization went from $650 bln to $430 bln yesterday and has now rebounded to $585 bln.
Bitcoin went from the all time high of over $20,000 to as low as $11, 970 in just a matter of days. By press time it has partially retraced its losses and is now traded at around $15,500.
Ethereum, the second largest cryptocurrency, lost almost $30 bln in market cap yesterday, but has largely recovered. With the market capitalization of $72 bln, it now trades for around $720 on European exchanges and as high as $906 on South Korean markets.
Bitcoin Cash experienced the greatest price volatility of all major digital currencies over the last 48 hours. The price fell from $3,909 to $1,970 but at press time is back to $3,400.
The extreme market turbulence came days after the alleged insider trading at Coinbase, one of the biggest cryptocurrency exchanges.
Good news vs. bad news
It’s been an extremely volatile week for the entire digital currency industry. Following CBOE’s Bitcoin futures trading start on Dec. 10, the CME group launched a futures product of its own. Trading at CME opened Dec.17, roughly when Bitcoin’s volatility began to increase.
On Dec. 20 Litecoin creator Charlie Lee sold or donated all his Litecoins, ostensibly to avoid “conflict of interest.” However, some have questioned his motives, since just a week earlier he predicted a multi-year bear market which would see the price of Litecoin drop as low as $20.
Ok, sorry to spoil the party, but I need to reign in the excitement a bit…
Buying LTC is extremely risky. I expect us to have a multi-year bear market like the one we just had where LTC dropped 90% in value ($48 to $4). So if you can’t handle LTC dropping to $20, don’t buy! 😀
— Charlie Lee [LTC] (@SatoshiLite) December 11, 2017
Joining major institutions like CBOE and CME in their Bitcoin agenda, Goldman Sachs announced its plans to set up a cryptocurrency trading desk on December 21. It will be opened by the end of June 2018.
What prompted the latest dip in the entire market is yet unknown. Charlie Shrem, a founding member of Bitcoin Foundation, believes that the market has already seen similar price movements and there is no reason to panic.
— Charlie Shrem (@CharlieShrem) December 22, 2017
Many in the /r/BitcoinMarkets subreddit simply ascribed the drop to Bitcoin’s rapid ascent, having gone from $9,000 to $20,000 in just three breaks without ever stopping to establish support.