Crypto Crash – A Quick Recovery?
Yesterday's Black Friday had several people panicking and huge amounts of money flew out of the crypto currency markets as prices of the main coins skittled all over the place. At one point, Bitcoin which is the largest crypto currency saw its price slide to less than $11,000 dollars - an almost 50% loss over the week with several investors dishing out after they bought at high prices. Other currencies also suffered with the prime loser being Bitcoin Cash which saw its price wallop down to around $1,800 whilst Ethereum went down an astonishing 35% to around 550, levels not seen since October or early November. Ripple was perhaps the best performer of the day since it had earlier reached a high of $1.20 but fell back by around 25% to $0.75. Dash, Litecoin and Ethereum Classic also lost considerably with dips of between 35 and 40% with the former diping to well below the $900 mark when it had been trading at over $1500 only a few days before.
The market cap of crypto currencies had reached $650 billion on Wednesday but with this savage hit, it went down to around $400 billion, an incredible reduction of 30% or a quarter of a trillion dollars.
However all this changed quite quickly when a recovery began in the late hours of the afternoon that saw the major cryptos recover most if not all of their losses in just a few hours. As the crypto currency commenteriat began wailing about crashes, Black Fridays and all that, the Asian market came into play and everything went on the rise again. Bitcoin surged to well over $14,000, Ethereum soared to well over $650 and Ripple managed to go up to around $1.07 - not so far off its all-time high of $1.20 achieved just hours earlier. Bitcoin Cash also recovered to the $2700 level although this was well off its all-time high of $4300 achieved only days earlier. Litecoin also regained the $280 level which was also 15-20% off its high of $330 while Dash traded around the $1100 mark again.
Some analysts have asked about the possibility of insider trading regarding the incredible surge of Bitcoin Cash over the past days with the correspondent slump also attributed to some financial meddling.
Coinbase CEO Brian Armstrong wrote that: "I take the confidentiality of material non-public information very seriously as CEO. Given the price increase in the hours leading up the announcement, we will be conducting an investigation into this matter. If we find evidence of any employee or contractor violating our policies - directly or indirectly - I will not hesitate to terminate the employee immediately and take appropriate legal action."
Bullish investors such as Mike Novorgatz have said that the price of Bitcoin should stabilize around $16-17,000 in the short term but he also expects it to rebound drastically in 2018 to reach highs of $50,000 "Looks to me like a short term top is in. My hunch is we consolidate between $10,000 - $16,000 for a while. Extreme would be $8,000. Bull market isn't over. Just pausing.", Novgoratz said in a tweet.
With the price increasing to well over $14,000 in just a few hours after it had dipped below $15,000, it looks like Bitcoin will still be a considerable force for the future.