Wrath of the Bitcoin Titans

  • Low vol was yesterday
  • Freefall out of the blue
  • Hash power war around the bitcoin cash hard fork
  • Bosch reaffirms IOTA commitment

November 16, 2018. A sudden free fall like price drop across assets on Wednesday sent Bitcoin and many other assets to their lowest levels in a year and brought an end to the prolonged low volatility trading regime we have seen since August. Within 24hours, the crypto market suffered one of the most severe washouts of 2018 as more than $25 billion worth of market cap evaporated. Bitcoin, which demonstrated a nice level of stability as of late, recorded a drop of more than 11% and also dragged other cryptoassets down. The drop finds its roots with the Bitcoin Cash hard fork. In the run-up of this chain split, a veritable war broke out between the parties supporting the concluding Bitcoin Cash SV (Satoshi’s Version) and Bitcoin Cash ABC, an upgrade to the software which is ought to help scale the network and provide for smart contracts. This fork is somewhat unique in the sense that the community was forced to choose either or, and not as usual find a consensus to split into two chains. As a consequence Bitcoin Cash (BCH) recorded the worst drop, falling by more than 20% at one point. In a seven-day span, BCH dropped by over 50% vs. the US dollar and by nearly 40% against Bitcoin (BTC). The sell-off also caused volumes to spike as we saw BTC volumes more than doubling in no time. The fight for dominance is all about hash power i.e. allocating resources to mine a particular cryptocurrency in order to have say in the fork. And the allocating of Bitcoin resources to the new Bitcoin Cash forks made the market tumble. Unfortunately, this depicts that the market in its currently susceptible state is still somewhat directed by some large players and their interests. Ultimately, we expect this to be a temporary move and the market to be bought up as soon as the situation normalizes and resources move back into the serious business. Furthermore, some good part of the correction can be accredited to liquidation trades and stop orders triggered. Such a washout could also be indicative for capitulation of short term bets and set ground for long term positioning...

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