Exhale. The nightmare of the 2018 cryptocurrency market is finally over.
Of course, more downside is always possible, if not likely, but at least the year in which bitcoin prices dropped more than 80 percent and the broarder market lost nearly $700 billion of total capitalization is over.
By now, you’re probably well aware the world’s premier cryptocurrency, bitcoin (BTC), catapulted more than 2,500 percent from its 2017 low to reach a new high of almost $20,000 by December of that year.
Unfortunately for those at the time who were betting on more immediate upside, one of bitcoin’s many speculative bubbles or “hype cycles” reached its peak on Dec. 17, 2017 and its price has been trapped in a steep and record-setting downtrend ever since.
What exactly transpired for the price of bitcoin over the past 365 volatile days is explored below.
Price History
When reviewing bitcoin’s 2018 price history, two technical developments stand out: the moving average death cross and breaking support of $6,000.
Moving averages are exactly what the name suggests – an average of bitcoin’s price over specified time periods that when plotted on a chart tend to provide support and resistance for price, as well as the strength and bias of the longer term trend.
Multiple moving averages are commonly used on the same chart and complete the bearish development known as a ‘death cross’ when a major short-term moving average crosses below a major long-term moving average, indicating a significant loss of strength to the longer term trend.
BTC/USD witnessed a death cross between the 100- and 200-day moving averages on April 16, confirming the end of its most recent bull market.
Before the death cross had taken place, price fell to and found support near $6,000 in February.
All eyes were on this level from that day forward as price went on to test it several more times before finally breaking down nine months later on Nov. 14.
Up until this point, many believed $6k had fortified itself as the ‘bottom’ of the 2018 bear market since it had been strongly defended for what in crypto time seemed like an eternity.
Coincidentally, Nov. 14 was the day before one of the world’s largest crypto-networks, bitcoin cash (BCH), underwent a divisive hard fork, which many suspect provided enough uncertainty in the broader market to catalyze bitcoin’s break below $6,000.
Now having closed the year at the price of $3,747, 2018 will go in the record books as bitcoin’s worst performing 12-month stretch ever in terms of price.
The leading cryptocurrency’s 2018 performance of a more than 70-percent depreciation from its opening price of $13,062 is considerably worse than the previous record holder, 2014, the year when its price fell roughly 55 percent open to close, according to CoinDesk’s pricing data .
Trading Volume
Bitcoin monthly trading volume peaked towards the end of 2017, bringing in a total of $70.2 billion across exchanges in November just before its price reached an all-time high, according to data from Bitcoinity .
Trading volumes, along with price, have been stuck in a downtrend ever since and for all of 2018.
Just $7.8 billion in monthly trading volume was recorded in September – a stark difference and 88 percent drop from the high recorded in Nov. 2017 and a 15-month low at the time.
The volume performance for 2018 isn’t all discouraging, however.
Using data from Coinmarketcap, a post from Satoshi Capital Research revealed over $2 trillion worth of bitcoin was traded in 2018, which as of Dec. 1 marked a 61 percent increase from the previous year.
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