Following a period of general weakness in the cryptocurrency markets over the past several days, Bitcoin has fallen down to its previously established 2018 lows, leading many altcoins to plummet.
Despite the current bloodbath in the crypto markets, one analyst believes that cryptocurrencies will become an investment safe haven as the equity markets face growing instability.
At the time of writing, Bitcoin is trading down 4.5% at its current price of $3,650, just a hair above its 2018 low of approximately $3,600. Because this price level proved to be a support level when it was first touched in late-November, it will be interesting to see how Bitcoin’s price responds to this region over the coming hours.
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Bitcoin Instability Leads to Altcoin Market Bloodbath
Bitcoin’s current price action has caused the altcoin markets to take a major hit, with multiple cryptos trading down 10% or more.
At the time of writing, Bitcoin Cash (BCH) is the worst performing altcoin and is currently trading down over 15% at its current price of $115, setting a fresh all-time low around this price.
BCH is currently trading down nearly 82% from its recent highs of $630, which were set in the weeks prior to the hard fork event that occurred in mid-November. This event – in addition to the current market conditions – is likely the main factor contributing to BCH’s downwards spiral, as it decreased investor confidence and split the community into a civil war regarding the original Bitcoin Cash, and the hard fork version – Bitcoin SV.
Ethereum has also set a fresh 2018 low today and is currently trading down over 7% at its current price of $97.5. Yesterday, ETH briefly dipped down to approximately $100, but quickly bounced to $104. Despite this, ETH was unable to uphold the $100 support level and has not yet established a new support level.
XRP is currently tracking Bitcoin’s performance quite closely and is trading down 4.4% at its current price of $0.327. Although 4% is no small drop, XRP is one of today’s best performing altcoins.
Despite the recent price action being demoralizing to investors, one industry insider expects cryptocurrencies to become a safe haven for equity investors in 2019, who may witness increased market turbulence in the stock markets amidst growing concerns surrounding a trade war between the U.S. and China and increasing interest rates from the federal reserve.
Ian McLeod of Thomas Crown Art, a blockchain-based company that utilizes smart contracts for artwork, spoke to MarketWatch about this theory, saying:
“There’s a growing list of investment tailwinds to consider for 2019. These include significant trade tensions, rising interest rates, political uncertainties, including Brexit, and complacent financial markets. Against this backdrop, we can expect cryptocurrencies will increasingly be seen as investors’ ‘safe havens’ in 2019 and beyond.”
Whether or not Bitcoin holds $3,600 as a level of support will likely set the tone for how the markets fare for the remainder of the week.
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