Major cryptocurrencies crash more than 30% as ‘fear, uncertainty, and doubt’ grip the market

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REUTERS/Alex Grimm

  • Bitcoin is selling off aggressively on Friday as investors cash out before Christmas.
  • The sell-off has spread into other cryptocurrencies.
  • Litecoin, ether, and bitcoin cash have seen losses of double-digit percentages.

LONDON – Major cryptocurrencies around the world are selling off aggressively on Friday as the market is gripped by what one analyst described as “fear, uncertainty, and doubt.”

The price of bitcoin crashed overnight with no apparent catalyst, with the general lack of liquidity in the market exacerbating that move and wiping as much as $4,600 off the cryptocurrency’s value in early European trading.

Earlier in the week, bitcoin’s price started to plunge after one of the founders of the influential website Bitcoin.com announced he would sell his stake in bitcoin.

“It’s clear by now that the entire crypto market is in a massive retracement,” Mati Greenspan, a senior market analyst at the trading platform eToro, said in an email.

“It started with a bit of profit taking, but it seems that the FUD” – fear, uncertainty, and doubt – “is now gripping the market,” Greenspan said.

While bitcoin’s drop was the first to accelerate, its fall has spilled into other major cryptocurrencies, with the likes of ether and bitcoin cash also seeing huge losses during Friday’s trading session.

Here’s a brief roundup of how things look in the market right now:

Bitcoin is down more than 11%, having dropped more than $4,000 – but it has found support at about $11,600 as of 2.40 p.m. GMT (9:40 a.m. ET):

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Markets Insider

“Looking at the overall cryptomarket, we’re now 25% from the top,” Greenspan said. “Timewise, we’re back to the levels last seen on December 13th. All in all, not too much damage so far, but the fear is certainly setting in with many, and there is a possibility to go further.”

Ether, a widely recognisable cryptocurrency powered by the Ethereum blockchain, is down by a similar margin.

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Markets Insider

And here’s bitcoin cash, which forked from bitcoin earlier in the year:

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Markets Insider

Litecoin – whose creator, Charlie Lee, earlier this week exited his entire stake in the digital currency, citing a “conflict of interest” – also plunged on Friday:

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Markets Insider

“Has the bubble finally popped? It’s hard to see the bell tolling just yet,” said Neil Wilson, an analyst at ETX Capital. “Large price swings have become so normal that it’s hard to decide – we can easily see this market bounce back in very short order.”

He added: “Whilst there have been some hacks, public infighting in the mining community, lots of rumoured forks, and regulatory pressure building on some fronts, this is likely to be a simple bout of risk-off selling as investors rebalance towards year-end.”