Over the past day, the BTC value has declined from 3,550 USD to 3,357 USD as its daily low, accounting for over 5% decrease.
The sudden BTC price drop made the cryptomarket lose approximately 6 billion USD within mere hours. Some dominant digital currencies, such as BCH, recorded over 10% losses, suffering the biggest drop of this month.
Some analysts believe that the BTC value decline to a new 12-month low after the near-term decline in the cryptomarket’s valuation.
Starting from early January, for more than three weeks, the digital currency marketplace has been facing difficulties in attempting to display an increased level of volatility on the upside.
BTC remained stable within a small ballpark of 3,500-4,000 USD for a little over two weeks, from January 11 to 27.
The unexpected BTC price drop, as well as the decline experienced by other currencies was possibly caused by technical factors as opposed to the fundamental ones.
Josh Rager, a cryptotrader, stated today that in the event that the value of the dominant digital currency goes below the 3,400 USD mark after a two-week stability period, the likelihood of dropping to its year-low is very high.
Everyone’s (well, except for bears) expectation was that the upside rally of BTC this year has been the commencement of the accumulation phase after a prolonged bearish sentiment dominating the marketplace.
Nevertheless, many cryptoanalysts pointed that an accumulation phase doesn’t always provide a transition to a mid-term rally.
An economist and digital currency analyst, Alex Krüger, said that in order to start accumulating, there has to be some distribution. Accumulation stands neither for a bullish sentiment, nor for a bearish one.
Previously this week it was reported that the digital currency industry is seeing expansion and there are more and more firms in large reasons every day.
Fundamental signs, including the transaction volume of the BTC mainnet, which averages at nearly 280,000 transactions every day, and the utilization of dApps on smart contract protocols have displayed a recovery since late 2018.
Considering that a narrow value range in which the majority of digital currencies were more or less stable for weeks has been destroyed, instability to the downside is anticipated in the weeks to come.
In the event that the BTC price declines to its yearly low at 3,122 USD as some cryptoanalysts predict, the price of other dominant digital currencies and lesser market capitalization coins will most probably decline substantially versus both BTC and USD.
Even now, ETH dropped by over 7% on the day, going from 112 USD to 104 USD, approaching a dangerous decline below the 100 USD support level.
The Crypto Dog, a renowned cryptotrader responsible for shorting ETH in early January proposed that ETH has been on a decline trend for some time now.
Generally, in the near-term, cryptotraders anticipate dominant digital currencies to display poor performance versus BTC and USD.