The cryptocurrency market declined across the board Thursday, as bitcoin, Ethereum and the rest of the major altcoins retreated from recent highs.
Crypto Market Backpedals
After peaking above $518 billion on Saturday, the market capitalization for all cryptocurrencies has fallen to $469 billion, based on latest data from CoinMarketCap. That represents a decline of more than 9%. Trade volume across all digital assets approached $24 billion over the past 24 hours.
The latest drop in total coin value seems to have coincided with broader uptake in bitcoin, the world’s most popular cryptocurrency both in terms of market cap and trade volume. Bitcoin now accounts for more than 39% of the total market, a near seven-point increase over last month’s lows.
Bitcoin made a strong move above $11,000 on Wednesday, eventually hitting a three-week high of $11,329. As we wrote Wednesday, bitcoin in particular seems to be benefiting from a myriad of market forces ranging from favorable regulations to improved investor sentiment.
At the time of writing, the cryptocurrency was worth $10,901.
Other major cryptos were also down at the start of Thursday trading, with Ethereum slipping 3.6% to $864.83. Ripple’s XRP token declined 2.7% to $1.04, while bitcoin cash fell 4.3% to $1,336.50.
Even Litecoin, a currency that has witnessed a 50% surge this week, fell more than 3% to $219.43.
Paul Singer Calls Cryptocurrencies a Huge Scam
Elliot Management, a multi-billion-dollar hedge fund headed by Paul Singer, recently came out with a report calling cryptocurrencies “one of the most brilliant scams in history.” It added that “FOMO (fear of missing out) has solidly trumped WTHIT (what the hell is this??).”
In the cryptocurrency world, talk is incredibly cheap, and arguments from authority don’t hold much credence. Although Elliott dedicated three pages to cryptocurrencies, there doesn’t seem to be a strong argument against cryptocurrencies. (Calling cryptos “nothing except the marketing power of inventors, financiers and others who love the idea of buying a black box…” is not an argument.)
That being said, the fund’s comments may have resonated with speculators who are already on the fence about re-entering the market. After all, the daily news headlines play a huge role in shaping investor sentiment, regardless of whether those headlines are true. This has been demonstrated time and time again by regulatory developments in nations such as South Korea and India.
As Singer’s comments clearly show, there’s still plenty of FUD (fear, uncertainty and doubt) driving the cryptocurrency market. This is unlikely to change soon even as bitcoin and the technology that underlies it enjoys greater mainstream adoption.
Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
Featured image courtesy of Shutterstock.
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