If you listened in to the altcoin panel discussion at the San Francisco CoinSummit last week, you may now appreciate their perspective on cryptocurrency. The wise men argued that cryptocurrency should not be viewed as a lucrative investment or get-rich-quick opportunity. Rather, it’s a pioneering technology in an experimental phase, undergoing constant refinement and hopefully one day graduating to become a viable currency.
The crypto market is undergoing some of its ugliest trading in weeks and valuations are their lowest since the great crypto boom and bust last December, which like this time around, was driven by fresh edicts against cryptocurrency coming out of China.
This time, BTC38 sparked panic by confirming rumors of an imminent crackdown, saying it is halting yuan deposits and trading in order to comply with regulations of the People’s Bank of China (PBOC). Today, OKCoin and FXBTC are also announcing the suspension of deposits. However, Huobi CEO Leon Li says that his exchange has not received any formal notice.
Bitcoin (BTC) is trading near $420, down by about 15% from its earlier plateau near $490. This is its lowest consistently traded level (as opposed to the occasional flash drops observed in with a massive, uncontrolled sell order) in 2014 and is even rivalling the lows following December’s crash.
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More worrisome for investors this time around, however, is the gradual downtrend occurring over the last few weeks since the MtGox collapse. Such slumps are difficult to emerge from, as opposed to sudden, sharp drops often driven from panicked selling as observed in December. The longer BTC’s price languishes at low levels, and the longer it points in a downward trajectory, the more such price levels become the consensus and the longer it takes to recover, if that happens.
Litecoin is also establishing new multi-month lows, hitting $10.22 before recovering back to $11. At the peak of selling, this represented a 24% decline.
Interestingly, the steep declines occur as the Dow Jones and S&P 500 equity indices set new record highs yesterday, implying that there’s no mass flight to cash by investors.
Every coin ranked in the top 10 for market cap is heavily in the red. Out of 100 coins tracked by coinmarketcap, only 9 are positive today. Clearly, the threat is applicable to all of cryptocurrency.