Market-Capitulates as Bitcoin (BTC) Posts Negative Year-on-Year Returns

Most major coins lost between 10 and 20%, while traders and investors brace for a protracted period of depressed prices.

After months of low volatility, the market went through another shakedown, spreading from Bitcoin (BTC) to all other assets. A 20% drop in values brought assets to their knees in what also looks like a quarterly sell-off.

BTC prices stabilized at $5,647.60, after massive selling saw 24-hour volumes exceed $8 billion. Trading mostly happened against the USD and USDT, as liquidation brought down the price. Those who could not escape through USD directly bought Tether (USDT). The attempt to liquidate USDT on Kraken once again brought the price as low as $0.96.

The latest sell-off was interpreted as a capitulation event.

“To put it plainly, today’s dip is likely indicative of the fact that the most recent round of crypto speculators are capitulating. Thanks to revised short-term expectations that call into question the idea of a bull run by the end of the year, many are likely taking their chips off the table,” said Marshall Hayner, Founder of Metal Pay, in an emailed statement to Cryptovest.

The dip has affected altcoins much more, and hit especially hard some hot projects. Cardano (ADA) stopped its climb to $0.08 and crashed to the $0.06 level, despite being one of the more widely promoted digital assets.

Other coins proved more resilient, such as Stellar (XLM), which returned to $0.23 and limited losses. Ripple’s XRP returned to $0.45.

As for Bitcoin Cash (BCH), the upcoming fork with an unknown outcome returned prices to $420. BCH traded around $427.62, surrounded by uncertainty on the value or even the format of the asset in the coming days.

Ethereum (ETH) was also a hard-hit asset, sinking to $177.18, as the coin has been pressured in previous months for failing to deliver scalability and viable, widespread distributed apps.

On the bright side, after previous 20% drops, the market has managed to return to higher valuations. Rohit Kulkarni, Managing Director of Private Investment Research at SharesPost, suggested the possibility of a recovery under certain conditions:

“We believe that there are three likely catalysts that could result in a crypto market turnaround in the next six months: There is greater clarity from regulators which could embolden the market; A select group of blockchain startups that have completed token offerings in the past year finally announce innovative commercial products; As smart money and institutional capital keeps piling up, investors pull the trigger and call the bottom of the market.”

The past three months saw multiple altcoin rallies for projects with good representation on exchanges. Yet the past 12 months have actually delivered negative returns for anyone who invested in BTC in November 2017. Based on data from Onchainfx, investors in BTC have lost a net 21.4% in the past year, while buying DogeCoin (DOGE) in November 2017 would have doubled the investment.

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