While 2019 has usually been a fabulous year for the Bitcoin price, those who have been following the cryptocurrency market for the past week have noticed a diverse story unfold.
The value of the world’s oldest and most successful cryptocurrency was selling around $8,424 at the time of writing, which is a cost level that hasn’t been observed since mid-June.A few minutes ago, Bitcoin suffered a massive slump. Also Ethereum, Ripple and all other big cryptocurrencies were affected. Within a few minutes, Bitcoin’s share price dropped from around $ 9,400 to around $ 8,300 and lost $ 1,100 in the near term. The course seems to be recovering slightly now. Currently, Bitcoin is trading at around $ 8,500.
What’s next with Bitcoin?
For short-term attracted investors, these days can be difficult. The long-term investor should be less concerned. Anyone who has been in the crypto market for some time understands that these ups and downs are perfectly normal. The market is remarkably driven by speculation and emotion. Although we have now experienced a major setback, we have been up around $ 4,600 since January this year.
Bitcoin Hashrate breaks drastically
Bitcoin’s Hashrate has mysteriously dropped by 40% from yesterday. The hashrate dropped from around 98 EH / s to 57.7 EH / s and has meanwhile recovered to 67 EH / s. This arrived shortly after reaching an all-time high of over 100 EH / s on 18 September.
It is still unclear what is responsible for the loss of hash power. Bitcoin Cash and Bitcoin SV use the same hashing algorithm. None of the two showed an increase in the rate of hashrates, which precludes switching from miners to another project.
There are some concerns about the incident from the Bitcoin community. The hashrate is there to secure the network and represents decision-making power. If suddenly a significant part is missing, it can be used for anything.
Emin Gün Sirer, a renowned professor of cryptocurrencies, has tweeted that Satoshi Nakamoto had calculated the proposed 6-block confirmation on the assumption that an attacker had 30% of the hashrate. According to Sirer, the crypto exchanges should increase the number of confirmations to protect themselves from possible attacks.
If you operate an exchange, or a merchant that accepts BTC directly (but let's be honest, no one does that), you should increase # of confirmations when you see a hashrate drop exceeding 30%.
What is the reason?
The reasons are still unclear – but we can already speculate. It may be possible that investors are disappointed that Bakkt was unable to drive the Bitcoin price. In addition, Bitcoin was for some time in a falling wedge, which could dissolve either strong up or down sharply. Apparently, the strong downward dissolving variant has prevailed.
Why do the other cryptocurrencies concur?
Cryptocurrencies are always “relatively similar” to Bitcoin as they belong to the same asset class and have a “relatively low” trading volume. Many cryptocurrencies are traded only against Bitcoin. Therefore, even if the price remains stable against the Bitcoin, they often lose dollar value when Bitcoin leaves feathers. However, as cryptocurrencies are also traded against dollars, the uncertainty currently seems to affect the entire crypto currency market.
Things have been serious enough for Bitcoin on Tuesday, but the altcoins have proved more dangerous. Of course, it should be remarked that cryptocurrencies other than Bitcoin tend to drop more when the Bitcoin price goes down and pin higher during bull markets.
At the time of this writing, Ethereum was dropping 6.80% against Bitcoin, Bitcoin Cash was falling 14.12% against Bitcoin, and EOS was declining 18% against Bitcoin.
Disclaimer: This information should not be interpreted as an endorsement of any cryptocurrency. It is not a recommendation to trade. The crypto market is full of surprises and overhyped assets. Do your research before buying anything. Do not invest more than you can afford to lose.
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