Crypto Market Continues to Bleed as BTC Price Hovers Around $4,000

November’s dip can now rightly be classified as one of the most significant, if not the largest, in the cryptocurrency market since its inception.

Following the drop of BTC price below $5,000, investors have been hoping that it wouldn’t plunge further, only for them to be shocked by a drop below $4,000 in a matter of 15 minutes on Coinbase.

Things are looking  a little better now, as Bitcoin’s price has climbed back up to over $4,000 after going as low as $3,600. 24-hour trading volume for BTC has mainly come from Seychelles-based P2P trading platform BitMEX, which has seen over $4 billion in sales.

The drop below the $4,000 mark has further dampened the spirits of enthusiasts and analysts who predicted that Q4 2018 would bring a new all-time high for the market’s number 1 digital asset.

Others have cautioned patience, urging investors to view the market’s prospects in terms of years and decades.

Earlier this year, Anthony Pompliano, noted investor and Bitcoin proponent, altered his prediction from the beginning of the year to state that Bitcoin may go as low as $3,000 — but he is still highly optimistic and believes that bear markets help weed out investors who have simply jumped on the bandwagon.

Pinpointing reasons for the market’s decline is virtually impossible, but the general consensus is that a combination of Bitcoin Cash’s hard fork, Bakkt’s delay and market manipulation has scared skittish “tourist” investors into selling their Bitcoin — and sell-offs have a snowball effect.

Furthermore, the CME Bitcoin Futures contract expires on this coming Friday. Historically, markets have been volatile around this period, and this might also be contributing to the crash.

Andreas M. Antonopoulos describes the market behaviour best, saying,

The Effects of the Crash on the Bitcoin Ecosystem

The price crash has severe consequences for the Bitcoin ecosystem.

The third largest mining pool, F2Pool, estimates that over half a million Bitcoin mining pools have shut down as a result of the price decline. In 20 days, the hash rate has dropped from 54 million TH/s to 41 TH/s.

The decline in hash power comes primarily from miners who are currently operating at a loss. Cryptocurrency mining is a market unto itself, with miners around the world competing to build the most computationally efficient setups and rigs, while keeping electricity, hardware and regulatory constraints in mind.

In any case, this price crash is somewhat of an anomaly in Bitcoin’s history, as the cryptocurrency has typically performed well towards the end of the year.

For now, it’s still unclear if Bitcoin has reached the bottom, and investors should bear in mind that the bear market could continue into 2019.