Why did Bitcoin dump to $5,600? For many spectators, the Bitcoin Cash hard fork is thought to be the reason for a sizeable drop in the price of Bitcoin this week.
But is this really true?
Did the Bitcoin Cash hard fork really cause Bitcoin dump?
But wait, here’s one very pragmatic reason as to why Bitcoin is struggling in recent days.
The Bitcoin Dump and Correlation with Traditional Markets
As you may know, traditional markers have really suffered in recent weeks. Apple in particular experienced a significant decline with more than 20% shaved off the stock price.
With this in mind, if you take a look at the correlation between Bitcoin and the traditional market this week, we can see a very obvious pattern. In other words, the Bitcoin dump looks to correlate with movement in traditional markets.
That’s not to say there is ryhme or reason for this correlation – that’s just not the Bitcoin way. In fact, this trend is unlikely to continue for much longer. But I think we can agree that fears in traditional markers can have an impact on the price of Bitcoin and we have seen bubbles burst in recent times in an eerily similar way.
The point being, it would be naive not to assume that traditional markets causing this downturn is both a possibility and a probability.
For the purpose of context, check out the price of Bitcoin last year versus the Nasdaq Tech Bubble from the late 1990’s. Needless to say, the Bitcoin Cash hard fork is just not significant enough to have so much impact on the market.
BTC ABC Leading the Bitcoin Cash Hard Fork?
Speaking of which, it looks as though Bitcoin Cash ABC are on course to outperform BTC SV in the race for dominance. Although more time is needed to see who prevails, BCH is currently in the lead with regard to hash rate, with more than ten blocks separating the two.
Will Bitcoin continue to slide and will traditional markets spiral any further?
As always, only time will tell.
Writers Disclosure: I am not a financial analyst. The above article was written based on views and opinions on Trading View. Derek Cullen is a freelance cryptocurrency writer who creates interesting content for small businesses. You can hire Derek to write for your website here on Deadly Content.