Bitcoin Drops to $9,300, Cryptocurrency Market Loses $20 Billion Overnight

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The bitcoin price has dropped to $9,300, demonstrating another 3 percent decline in value over the past 24 hours after failing to test the $10,000 support level. The cryptocurrency market followed the short-term price trend of bitcoin and has dropped more than $20 billion overnight.

Bitcoin’s Slump

On May 5, the global average bitcoin price was less than $100 away from achieving the $10,000 mark, as regions such as Hong Kong, Japan, and South Korea with premium rates already surpassed $10,000. However, bitcoin failed to secure the $10,000 support level and immediately declined by around 3 percent, to $9,600. 

Since then, the bitcoin price has fallen an additional 3 percent to $9,300 and the volume of the cryptocurrency market has dropped by around $3 billion, from $26 billion to $22.9 billion.

Technical indicators of bitcoin including the Relative Strength Index (RSI) and Williams’ Percent Range (WPR) demonstrate a neutral zone, showing that bitcoin has not been oversold or overbought in the past 48 hours. But, simple and exponential moving averages show a negative short-term trend for bitcoin and if the dominant cryptocurrency fails to hold its volume and momentum in the $9,300 mark, it may be possible for the bitcoin price to record another 2 to 4 percent decline in the next few days.

Traders still remain optimistic in regard to the May 7 Ethereum Securities and Exchange Commission (SEC) hearing in the US, as Ethereum founders including blockchain development studio ConsenSys founder Joseph Lubin firmly stated that they have done sufficient due diligence prior to the launch of Ether to ensure that it is not categorized as a security and remains compliant with existing regulations.

If the SEC declares that Ethereum is not a security, as it did with bitcoin, it will allow the entire market to recover and increase the demand from investors for cryptocurrencies like bitcoin and Ether.

Previously, SEC chairman Jay Clayton said that a token or a cryptocurrency can be considered a security if it is issued by a single company and if the issued digital asset directly affects the organization in a positive way.

Ethereum was not created by a commercial company but rather by an open-source development team and its code is being written by an open group of developers without the presence of a centralized team or commercial company.

As CCN previously reported, Lubin said:

“We spent a tremendous amount of time with lawyers in the US and in other countries, and are extremely comfortable that it is not a security; it never was a security. We are absolutely unconcerned about the current discussions. I think we already have a regulatory scheme; securities laws in this country govern securities. If you fail the Howey test, you’re not a security.”

Ethereum and Tokens

Depending on the statement of the SEC on May 7, the short-term price trend of Ether and tokens could change drastically. If the SEC declares that bitcoin is not a security based on existing regulations as the majority of developers, analysts, and investors expect, the value of tokens and Ether will likely surge by large margins in the upcoming weeks.