Cryptocurrency, the one-time darling disruptor of the financial market, is now in a race to the bottom as it’s market cap enters a dangerously low territory. As of December 6th, cryptocurrencies had fallen to a low of $119.2 billion, similar to it’s November swing to low market value. Several days prior, it’s low had briefly touched $115 billion, which was the lowest figure in 14 months. While those number may still seem comparatively high, they could instead represent that the changeover from traditional financial vehicles to cryptocurrency is not as seamless as previously touted.
After it’s low swing, the cryptocurrency market regained a bit of traction, finishing that day at $121.7 billion, a far cry from its high point just a week prior at $143 billion. All of the biggest names in cryptocurrency suffered during this lost, with Bitcoin leading the pack at a 2 percent loss and Bitcoin cash down even further. Cryptocurrency market leaders including XRP, Ethereum, Stellar XLM and EOS all lost significant value, falling between 6 percent and 15 percent.
One hint of a dangerous trend in the cryptocurrency market is the enormous volume of trading that accompanied Thursdays bottoming out of value. This could indicate that short sellers are taking control of the bear market that is forcing crypto shares lower and lower. Statistics show that these short sellers may account for at least a quarter of the trading volume through derivatives exchange BitMEX. Some of the currency selloff could also represent changing conditions in the overall market which continues to experience volatility on threats of economic woes. Many factors play into the value of individual products on the open market.
Ups and downs in the cryptocurrency market have become increasingly pronounced over the past year, with many values down more than 90 percent from their unbelievable highs. Not only does this loss of value negatively impact the health of the various cryptocurrency organizations but it also leaves everyday traders feeling lost in how to approach this from of trading. Leading Cyprus-licensed investment firm TradeFW reminds that “new FOREX, CFD and cryptocurrency traders have to begin somewhere” in their journey with the market, focusing on trading education and learning from the experience of others before adding their own investments to the mix.
Wall Street plans the release of a new cryptocurrency market in 2019 named ErisX. Until then, stocks may continue in their hunt for new lows while still experiencing momentary highs between.