The surprise collapse has sent shockwaves across the whole cryptocurrency marketplace with some altcoins (alternative cryptocurrencies to the market-dominating bitcoin) plunging spectacularly to new yearly lows. Ethereum, Bitcoin Cash and Ripple have been particularly badly hit, seeing double-digit declines as they head into apparent freefall. Bitcoin itself triggered the across-the-board capitulation on Monday as a steady climb towards the psychological barrier of $10k – a level it had surpassed only a week before – looked to be gaining momentum.
However, that climb was met with a brutal rejection, sending it tumbling from $9,975 to $9,760 before yesterday failing to even get a hook on the traditional safety net of $9,600 as it was sent tumbling below $9,150 this morning.
A fall of this magnitude had gone largely unchecked, with virtually all analysts and observers expecting BTC to build significantly as it approaches the May halving when the block reward for mining bitcoin is reduced from 12.5 per block to just 6.5.
The halving protocol – written into the core programming of bitcoin by its mysterious founder Satoshi Nakamoto – occurs after every 210,000 blocks are successfully mined, and is designed to ensure longevity of supply.
The event has already happened twice and, on both occasions, bitcoin followed the same pattern of building in price in the months leading up to the halving before rising significantly after it.
However, given bitcoin’s current price action, it would seem the script written on previous occasions isn’t being followed. In fact, it could end up being quite the opposite.
If the price can’t recover back towards $9,600 over the coming days there is a serious possibility that further falls could be on the cards. A bearish sentiment drove the value away from $10k, and that could set the narrative for a plunge below $9k and beyond.
Of course, given the wild volatility at play, it only needs one extremely wealthy player to buy-in at the current price and send things rocketing back towards $10k in a matter of hours. Uncertainty, it seems, is the only guarantee in this current market cycle.