The "Crypto King" fell from its lofty throne on Thursday, at one instance dropping below $6,000 - the first time since May - as a massive selloff in digital currencies broke out in the midst of escalating market panic triggered by the coronavirus pandemic.
The latest figures from Coin360 and Cointelegraph Markets showed the Bitcoin/US Dollar pair slipping to $5,912 on Tuesday. The currency tandem hovered around $7,130 as it reacted to news that US President Donald Trump had stopped all travel to Europe for at least 30 days.
The selloff grew through Thursday, with 24-hour declines reaching 30 percent on some currency exchanges. "That looks like a capitulation to me," financial analyst Alistair Milne said on Twitter.
Based on Cointelegraph update, various currency strategists, including BitMEX chief executive officer Arthur Hayes, believe the potential bottom for Bitcoin lies at $6,000 or worse, lower.
The shift downwards dragged Bitcoin's market cap down to $128 billion. At its highest, the crypto's market cap was $241.3 billion. It had traded at a level of $5,917 to $7,966 in recent 24-four sessions.
In the past week, the virtual cash has witnessed a drop in value, as it shed 30.1 percent. The volume of crypto traded in the 24-four hours to time of posting hit $43 billion of the total volume of all digital currencies.
The wild swings occurred as stock monitors the world over fall into bear markets and credit plunges on jitters the pandemic will cause a huge economic hole. The drop in value of Bitcoin threatens to compromise the deal from many bitcoin advocates that the cryptocurrency can be a safe haven in times of economic uncertainty.
As Cointelegraph disclosed, market analysts now broadly estimate the virtual currency to move in line with market volatility because of its lack of track record as a safe-haven asset.
The network's technical fundamentals, which had continued to register new records in the past weeks, now also felt the stress. Hash rate, a gauge of the computing capacity that miners were using to validate blockchain, retreated from its all-time peaks this week.
While most observers blame coronavirus concerns for today's crash, the fact is that crypto markets have always been highly volatile. Big price fluctuations are standard. The networks that will eventually enjoy mass adoption remain uncertain, as do many other factors which will affect the growth of blockchain.
There can be no doubt, however, that cryptocurrency represents a new global asset class. Study of business trends should be seriously considered. According to analysts, as more money flows into the crypto space, uncertainty will decrease and there will be a greater sense of stability.
