The brutal fall of Bitcoin
For the first time in 3 months, Bitcoin has initiated its first major move. Unfortunately for investors, this is a downtrend, with a price that passed this Wednesday, in the space of less than 12 hours, from $ 6,350 to $ 5,550.
It even fell in the afternoon of Thursday, under the bar of $ 5,400:
At the time of writing, however, the BTC price had stabilized above $ 5,600. The first digital currency even showed a rise of nearly 2% over the last 24 hours.
CNBC points to Bitcoin Cash
As part of CNBC’s “Fast Money” program, Brian Kelly, the founder of investment firm BKCM, gave his perspective on the recent downturn in BTC and crypto-markets.
He attributes this fall to the “crypto-civil war” that rages around the Bitcoin Cash network.
There are two camps: the first formed by Craig Wright, CoinGeek and Calvin Ayre, the second by ABC, Bitmain, Bitcoin.com and Jihan Wu.
In the aftermath of the fork that gave birth to two separate channels (BCHSV and BCHABC), the two clans are competing to operate a BCH chain likely to obtain the majority of votes in the community.
— CNBC's Fast Money (@CNBCFastMoney) November 14, 2018
“After a very calm period, volatility to the lowest, as almost never seen in the history of Bitcoin, everything has accelerated. What happened? Bitcoin Cash, which was born from Bitcoin last year, is making its hard fork.
Now, when a hard fork is set up, everyone is generally in agreement. Except that this time there is a disagreement between the members of the community. This has led to a real “crypto-civil war”, and this is what worries some market players, “he said.
Why does the Bitcoin Cash War affect all markets?
Thus, for Brian Kelly, worries arising from the fight around Bitcoin Cash seem to have had an impact on the entire market.
We know that the clan led by Calvin Ayre, dubbed Bitcoin SV, could lead a competition of hash power, since it threatened to attempt an attack against the network Bitcoin Cash.
For their part, Bitmain and Jihan Wu, supporters of Bitcoin ABC, have a significant influence on the Chinese miners’ community. As the leading ASIC chip manufacturer and manager of two large mining pools (BTC.com and Antpool), Bitmain could fight this initiative by redirecting its hash power used for the Bitcoin network to that of Bitcoin Cash.
If that happens, the bitcoin hash rate could, probably over a short period, drastically decrease, which would slow down the network.
Thus, if this “hash war” were to continue, it could have a negative impact on both Bitcoin and Bitcoin Cash. And this impact could spread to the entire market, since a drop in the BTC could have a negative impact on valuations of “altcoins”.
“Traders are worried about both the Bitcoin and Bitcoin Cash markets. Their networks could slow down, they might not work as well, the software update might not be successful, and even if it does, it could cause a big mess.
Traders started to sell, it triggered “stop loss”, everyone is now concerned. But the market has stabilized. From my point of view, this is a very short-term event, “reassured Mr. Kelly.
Take a step back
While these statements are reassuring, it should be noted that the advice provided by CNBC, have been, in the past, strongly criticized by several traders.
A few weeks ago, several observers had said that it would be, according to them, a counter-indicator, and recommended doing the opposite of what analysts in the chain advise.
Much wow pic.twitter.com/Wvd5J0YKiC
— CNBCIndicator (@IndicatorCnbc) September 5, 2018
Especially since several traders do not share the optimism posted this week by Brian Kelly.
If some thought it might be a low for Bitcoin, and the first digital asset could soon bounce back:
— Crypto Gatsby (@crypto_gatsby) November 15, 2018
— ₿lackbeard (@crypto_blkbeard) November 16, 2018
Overview charts day.
First one is $BTC.
This is not denial phase, this is despair phase.
Heard some guys selling 50-70% of their assets yesterday. Full attack mode on Twitter.
That's where we are. Not denial.
We don't know the bottom, however we're close. pic.twitter.com/FnDBm3jWSR
— Crypto Michaël (@CryptoMichNL) November 16, 2018
Other observers still seemed undecided:
— The Crypto Dog📈 (@TheCryptoDog) November 16, 2018
If you're shorting $BTC I feel bad for you son because there may be a squeeze and monumental run.
(Also could just dump to 3k tbh).
— Sir Salty The 1st🧂 (@SirSaltyThe1st) November 16, 2018