Other major cryptocurrencies also suffered on Friday. XRP, the second largest by market value, was down 7 percent while ether fell 11 percent.
Timothy Tam, CEO of cryptpocurrency research firm CoinFi, said bitcoin’s large move downward was a “combination” of factors.
On Thursday, the SEC extended their review period of a much-awaited bitcoin ETF until February 27. While Gabor Gurbacs, who’s spearheading the bitcoin ETF effort at VanEck, said the move was “expected” — the market still reacted.
“Historically there is price correlation with expectation of an ETF approval and downward movement when the ETF gets rejected or delayed,” Tam told CNBC Friday. “Sentiment among retail investors in the crypto space is already negative, so any negative news like this generates an overreaction.”
Michael Moro, CEO of Genesis Trading, said unlike prior weeks with drama in another cryptocurrency bitcoin cash, this week’s moves don’t appear to be event-driven.
“It looks like a continuation of the momentum trade that it has been for all of 2018,” Moro said. “Short interest has continued to spike, as trading firms look to take advantage of the volatility.”
Moro has also seen an uptick in selling by some long-term bitcoin holders.
“The general market sentiment seems to be that this ‘crypto winter’ could last for some time; not too many people are expecting a V-shaped recovery in 2019,” he said.
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