Crypto Crunch Not Influenced Long-Term by Bitcoin Cash (BCH) "Fork Wars," Says eToro Senior Market Analyst
An eToro senior market analyst suggests that Bitcoin's crash can be correlated to the sell-off of tech stocks.
It’s been a rough few days for Bitcoin, with prices falling at a rate that hasn’t been observed for several months. The shock was amplified because before the fall, the coin had been experiencing one of the longest and most pronounced periods of stability in its history.
Although many fingers are pointed at the Bitcoin Cash hard fork for this mess, it’s probably not as much a chaotic “end of the world” scenario as it may seem. At least this is what Mati Greenspan, senior market analyst at eToro, appears to believe when he compares the Bitcoin Cash hard fork with the OPEC crisis in the 1970s.
“Despite what many are claiming, my view is that current news events are only having a limited impact on [cryptocurrency] prices at this time… Same goes for the Bitcoin Cash hard fork and crypto, and OPEC with crude oil. These developments do influence short-term sentiment but are still not the main drivers,” Greenspan said in an email sent to Cryptovest.
He also drew on the example of a scandal surrounding Renault’s CEO, which influenced the automotive sector’s trading, “but it’s only a very small piece of the larger macroeconomic story playing out above.”
In a previous statement, Greenspan demonstrated that Bitcoin’s price does not correlate with any stock indexes like the S&P 500. However, this doesn’t mean that there’s absolutely no correlation between cryptocurrencies and other investment classes.
As he points out in his latest statement, there has been a loose correlation between cryptocurrencies and tech stocks. Both had a decent year in 2017, and this was especially true for more volatile assets.
“In 2018, we’re seeing a retracement of that,” Greenspan wrote.
At press time, Bitcoin’s price appears to be re-correcting itself, climbing out from a pessimistic and shocking Tuesday morning low of $4,388.75 to $4,800. Because trading volumes are going up, this may indicate that some traders remain confident that the coin can still hold value.