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Bitcoin Correction Wipes Out $4 billion in Value

Just last week, on May 24, bitcoin hit an all-time high of $2,791.69.  But on Monday, despite low volatility due to holidays in China, the United Kingdom and the United States, the crypto-currency fell 18.7 percent, or $520, according to data from CoinDesk.  The correction erased nearly $4 billion from the crypto-currency’s value.  Bitcoin’s market cap fell from $40.49 billion on Thursday to nearly $37.08 billion on Monday.

Bitcoin

Analysts are unsure of the exact cause of the pullback, with some citing profit-taking as the reason and others noting that longer transaction times could trouble the market, as can the continued growth of other crypto-currencies.  

Nevertheless, despite the recent price plunge, traders worldwide are still optimistic that bitcoin will continue soaring higher.  Total active margin trading long positions rose from 18,576.54 bitcoin on Thursday to 21,168.90 bitcoin on Monday according to CryptoCompare.  A notable rise in long positions indicates that traders continue to expect a price increase for bitcoin.  

Some analysts even expect bitcoin value to rise to $6,000, according to CNBC.  

Ethereum, a cryptocurrency that has recently earned global interest due to a steep price increase, may also be up for a correction, predicted Nicola Duke, an analyst at Forex Analytix who correctly predicted the bitcoin correction last week.  Ethereum hit a high of $227 last Wednesday and has already started reversing.  This crypto-currency has seen a 2,747.9 percent rise since January 1, 2017 when it started the year by trading at $8.  On Friday Ethereum traded at $191.78, but by the end of the day it was at only $162.46.  Duke believes that if the currency dips below $170 it will start the spiral down to the $140 level, mimicking bitcoin’s dramatic fall, perhaps before it heads higher as well.   

Sara Patterson
About Sara Patterson
Sara Patterson has a Master’s Degree in political science and enjoys analyzing both current events and the international markets to get a fuller perspective of the currency market. Before turning to financial writing, she taught English writing skills to high-school age students. Sara’s work has been published on various financial and Forex blogs.

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