Bitcoin has recovered some of its losses in the last couple of hours, adding some $300 to the price of one bitcoin and taking it to $4,700 after 36-hour sell-off that wiped billions from the cryptocurrency market.
The bitcoin price sell-off began last week as fears around a so-called hard in the bitcoin cash network, itself a fork of bitcoin, gripped the market amid threats to the sector from bitcoin cash’s two warring factions.
The bitcoin market then went into meltdown yesterday as investors processed reports some exchanges were altering the futures contracts amid the battle for control of the bitcoin cash network.
Bitcoin yesterday crashed under $5,000 for the first time this year, down an eye-watering 25% in two days, fuelling fears the cryptocurrency market is heading for collapse. Bitcoin today briefly fell to $4,237, according to the Luxembourg-based Bitstamp exchange, before climbing back to over $4,700 over the last couple of hours.
Bitcoin’s market capitalization has now fallen to $82 billion, down from more than $110 billion just two weeks ago.
Other major coins, including Ripple’s XRP and Ethereum’s ether, the second and third-largest coins, both also rebounded somewhat from losses of around 15% over the last 24 hours.
High profile bitcoin and cryptocurrency investors and traders have today come out in defense of the sector, appealing to panicked potential sellers not to bail out of the market, pointing to bitcoin’s turbulent past and repeated recoveries.
“Been through this many times already. Secret of success? Keep your head down and build,” said the widely respected founder and chief executive of Binance, the world’s biggest bitcoin exchange by volume, Changpeng Zhao (who earlier this month predicted a bitcoin bull run), via Twitter.
The sudden volatility in the bitcoin market took many by surprise after months of relative stability across the crypto market. This had though prompted some analysts to warn that the lack of any major market movement since early September would likely be the “calm before the storm.”
“This is not the first time bitcoin has seen calm waters. We’ve seen similar periods of modest volatility, and humble price swings,” Albright Investment Group founder Victor Dergunov wrote in a blog post just last week.
John McAfee, a computer security pioneer-turned cryptocurrency enthusiast, said: “People have panicked. But there’s no … need. We’re in a bear market … I’m 73 and have seen this dozens of times in many markets. Bear markets are like Winter. It’s always followed by a glorious Spring.”
The bitcoin and cryptocurrency faithful are now looking towards the ICE-backed Bakkt trading platform in December as well as the (now much less likely) U.S. Securities and Exchange Commission’s on a bitcoin exchange-traded fund.
Elsewhere, stellar overtook bitcoin cash as the fourth largest cryptocurrency by market capitalization today, after bitcoin cash lost more than half of its value in the last week in the wake of its civil war after weeks of gains.
As the bitcoin and wider cryptocurrency market falls, some are however buying the dip, according to trading platform eToro’s senior market analyst, Mati Greenspan, who said: “With all the falling prices lately, this definitely fits the definition of a buyers market.”
“Just a few weeks ago crypto traders were airing concerns about the lack of volatility in the crypto market,” said founder and chief executive of financial advisory group deVere, Nigel Green. “Now volatility is back and many savvy investors will be using this as a major buying opportunity, perhaps the last one of 2018. Savvy investors understand that digital currencies are the future of money and, as such, they will be capitalizing on the lower prices in order to build their portfolios and shore-up their positions.”