The cryptocurrency market witnessed intense selling during last week’s trading, as the selling deepened under the control of a bout of panic and fear among investors, as Bitcoin incurred losses by about 29% throughout last week’s trading, recording the third consecutive weekly decline, and it is also the largest weekly loss since end of March.
Bitcoin tumbled below the $5000 level for the first time since the beginning of this year, amid escalating fears of slipping below the $4500 psychological barrier. $6,300 and $6,600.
So far, the main reasons that led to the bloodbath in the cryptocurrency market are not clear, but it coincides with the announcement by the US Securities and Exchange Commission of the first civil sanctions against two cryptocurrency trading companies that did not register their initial coin offerings as securities, the agency said in a press release. On Friday, AirForex and ParagonCoin will each have to pay $250,000 in penalties to compensate investors and will also have to register their digital tokens as securities.
The authority demanded from those parties to provide refunds to investors, which raised fears that other companies that used sales proceeds as money to finance projects might have to do the same.
Some believe that the cause of the severe losses is the process of the total split of the bitcoin cash, or what is called as “hard fork”.
The cryptocurrency market has so far lost more than $660 billion of its value since its peak in January, according to CoinMarketCap data, and the data also shows that the price of bitcoin has fallen more than 70% in value from its December highs. 2017.
Bloomberg reported that the US Department of Justice is investigating whether the rise of cryptocurrencies over the past year was caused by too much manipulation, and at the same time, the agency expected the continued decline of Bitcoin, reaching the level of $1,500, losing approximately 80% of its value.
Britain's Financial Conduct Authority Chief Executive Christopher Woolard warned of the potential harm of some crypto-based derivatives during a currency trading event held in London last week. .
Principal partner at Fundstrat Global Advisors Thomas J. Lee has lowered his forecast for the bitcoin price target by the end of this year to $15,000 from $25,000. The $6000 level has led to a new wave of pessimism about the future of digital markets.
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