Bitcoin [BTC], the biggest cryptocurrency by market cap and the very first digital gold, is currently being crushed by the bear’s grip. The cryptocurrency which started to bleed in the market yesterday continues to stomp on the investors’ sentiments as the market cap of the biggest cryptocurrency has plunged to its all-time low for the year.
According to CoinMarketCap, at press time, the cryptocurrency is trading at $5503 with a market cap of over $95 billion. The cryptocurrency has a trading volume of $8 billion and has plunged by 12.75% in the past 24 hours.Along with the price falling to its all-time low, market cap of the biggest cryptocurrency has been depreciated of over $236 billion since its all-time high. The last time the coin had a market capitalization in this range was in November 2017, prior to the price skyrocketing in the market. Moreover, the whole cryptocurrency market cap is also at its all-time low for the year, with just over $180 billion. Moreover, the other cryptocurrency which was crushed by the bear is Ethereum [ETH]. The coin has fallen from its second position by market capitalization to the third position, giving up its seat for XRP.
The reason for the crash is believed to be the ongoing clash in the Bitcoin Cash [BCH] community regarding the hard fork which is scheduled today. Some investors are also expecting the price to breach $5000 mark.
BlazedAndConfused, a Redditor said:
“By the price action looking like it snowballed from a few single large sell offs, my guess is massive BTC bags dumped for capital to fund BCH or move into it to gain more forked coins. If BCH pumps up to the HF now we know why. If it doesn’t, we might assume hash power is being moved to support the favored BCH chain with BTC no longer profitable to mine. You can’t sell paddles to a sinking boat. Regardless it is short term”
Banterism, another Redditor said:
“Sometimes your banging the market and sometimes the market is banging you. It will come back stronger always does because greed and money never sleep they just transfer to someone else. I watched Wall St. the other day brought back great memories.”
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Bitcoin’s on-chain/off-chain valuation indicators the key point of focus as coin heads to $13,000
With the rise in Bitcoin’s price, the rest of the cryptocurrency market has followed suit by displaying a green trend across the board. In a recent series of tweets by popular cryptocurrency analyst Adam Tache, users were informed about the top Bitcoin on-chain and off-chain valuation indicators, derived from on-chain valuation models.
The analysis touched on the Mayer Multiple created by dividing the price by the all-important – 200 day moving average. The current average Mayer Multiple stands at a figure of 1.39, which may climb higher. Looking at previous figures, the normal Mayer Multiple figures stated that if the value shoots up to 2.4, then Bitcoin eventually retraces back to a comfortable 1.5. The Mayer Multiple is usually considered as the original indicator used to clock the valuation of Bitcoin.
Another major indicator discussed in the thread was the NVT Ratio invented by Willy Woo, Partner at Adaptive Fund. The indicator is used to calculate Bitcoin’s prominence or value in the cryptocurrency space by evaluating the amount transacted on the blockchain as a “proxy for investment flow and bear and bull market cycles.”
At the moment, the NVT ratio for Bitcoin is in an abnormal region compared to the start of previous bullish patterns. The NVT ratio was above the “bear market” separator, which meant that the cryptocurrency was overbought. When Bitcoin is overbought, it usually means that the buying pressure is much higher than the selling pressure. Adam Tache opined,
“NVT signaling overbought is likely due to a number of factors — namely the proliferation of exchange-based, purely off-chain txs driving short-term price action.”
The analysis also pointed out the liveliness of the Bitcoin indicator created by Tamas Blummer. The indicator showed the inverse count of lost or ‘HODLed’ Bitcoin, while stating that when the ratio increases, long-terms holders of the cryptocurrency decrease their positions. The indicator conveyed accumulation of Bitcoin when the ratio decreased.
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