This Wednesday, major digital currencies witnessed a phase of crisis as most of them were down by 10 percent. The most popular digital currency, bitcoin, went downhill on Tuesday night with a decline of $8000 which has not been covered till now. It decreased to a low of $7,442.92, one of the lowest prices in the last few weeks. As of now the last value carried by a single coin is $7,528.89 which is 7.1 percent less than its Tuesday Eastern US level value at Kraken crypto exchange.
Coinmarketcap reported that digital currencies witnessed a combined decline in value of $50 billion, falling steadily to $326 billion within 72 hours. Tom Lee, Co-founder Fundstart Global Advisors, defended digital coins by saying that institutional investors have been waiting for clarity in regulation before doing a stint in the crypto state. He also said that he still backs his prediction of bitcoin achieving the $25,000 mark. Lee told CNBC that his price target for the no. 1 digital currency remains at $25,000.
Lee gave the example of the historical trend of bitcoin losing its value by 25% every year. The historical data assessed by his company suggests that there will be an uptrend in the prices, eventually. Lee has advised investors to hold on to their digital assets as prices are about to go up within days. Although it is hard to keep bitcoin at $8,000 yet one must be persistent enough to gain when bitcoin reaches the $25,000 mark.
According to an analyst, bitcoin supporters should not be seeking a support line. Instead, they should explore the resistance levels for the current situation as digital currencies are still in trend. In a blog post, Jani Ziedins wrote, “Last week’s $9k support has turned into this week’s $8k support. And thus far it is giving every indication that $7k will become next week’s support. I hope you see the trend here. It takes most bubbles between six and 24 months to finish bursting. If bitcoin is like most bubbles, that means the worst is still ahead of us, and we should expect lower lows over the next few months.”
Bitcoin is not the only loser in the market as other virtual coins have also been struck with a huge devaluation. Litecoin (LTCUSD) has fallen by 8.2 percent to $119.10. Ether (ETHUSD), is down 10.6 percent to $586 and XRP coin from Ripple (XRPUS), fell by 10 percent at 59 cents.
The biggest loser is Bitcoin Cash (BCHUSD) which has declined by 12 percent and is now valued below $1,000 at $991.30. The much-hyped coin dwindled at $969.20 on Wednesday which was 15.8 percent lower than its original value. Earlier this year, Bitcoin cash enjoyed a 100 percent hike in April but suffered three weeks of successive losses afterward.
Nobody knows the exact reason for digital currencies to go through a sudden loss, but many factors have collectively contributed to the cause. Government crackdowns and suspicion about new regulations have demotivated newbie and institutional investors. Only time will tell the outcomes of plunging values. Till then it is better to keep a low profile in crypto space.
