Home Bitcoin News Bitcoin tumbles 5%, on track for worst day in three weeks

Bitcoin tumbles 5%, on track for worst day in three weeks

5 min read

Bitcoin and other digital currencies are trading sharply lower Tuesday, with bitcoin on the verge of notching its worst daily decline in three weeks.

The price of a single bitcoin

BTCUSD, -0.43%

was down as much as 6%, breaking out of a short-term trading band of $7,800-$8,200. Bitcoin last changed hands at $7,725.26, down 5.3% since Monday at 5 p.m. Eastern time on the Kraken crypto exchange, and is on track for its worst daily slide since July 10, when it booked a 5.5% drop.


The move comes after Nobel-Prize economist Paul Krugman said, in a New York Times op-ed, there is a real possibility that bitcoin’s price collapses, saying the digital currency doesn’t solve any real-world problems and compared with the current monetary system, it is inefficient.

“Instead of money created by the click of a mouse, we have money that must be mined—created through resource-intensive computations,” wrote Krugman.

Read: A total collapse in bitcoin is a real possibility, says Nobel-Prize economist Krugman

Irrational exuberance in trading is coming to an end

The volatile price action of cryptocurrencies in 2018 has caused some investor fatigue, according to one asset-management firm. However, the Santa Monica, Calif.–based Element Asset Management said it believes this behavior is coming to an end.

“The retail investor that has been forced to perpetually adjust their decisions in response to the market has likely lost the patience to continue making rational decisions. This investor has likely entered into a period of extreme decision fatigue,” wrote Element’s portfolio director, Thejas Nalval, and Kevin Lu, the firm’s director of quantitative research.

“The long-term implications of this change of behavior can be theorized and debated for months. We, however, choose to view this decision fatigue as a possible signal that the irrational exuberance is coming to an end and that the market fundamentals are now shaping up to a point that will see rational speculation drive price action in a more orderly manner.”

Read: Here’s the case against day-trading bitcoin

Crypto comments on Reddit.

Read: These may be the 3 biggest hurdles to a bitcoin ETF

Altcoins stumble; Bitcoin’s dominance nearing 50%

Altcoins, or coins alternative to bitcoin, have followed bitcoin’s lead Tuesday. The overall decline in cryptocurrencies has pushed the value of all digital currencies to $277 billion, a 10-day low.


ETHUSD, -0.67%

was down 4.7% at $432.33, Bitcoin Cash

BCHUSD, -0.65%

is trading down by 5.1%, at $770.60, Litecoin

LTCUSD, +0.26%

is down 5% to $78.26 and Ripple’s XRP coin

XRPUSD, -0.16%

was trading at 44 cents, down 2%.

Bitcoin futures finished Tuesday in the red. The CME Group Inc.’s August contract

BTCQ8, -0.84%

closed down 4.6% at $7,730 and the comparable Cboe Global Markets Inc. contract

XBTQ8, -0.47%

 finished the day at $7,710, down 4.8%.

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