The cryptocurrency market has been painted red as the top 10 currencies by market cap have reported double-digit falls, according to CoinMarketCap.
The likes of bitcoin, ethereum, ripple, litecoin have witnessed a sharp dip of around 20 percent, 25 percent, 35 percent, 27 percent respectively, over the past 24 hours.
An analyst’s poll conducted by CoinDesk says that profit booking has been the reason behind these sharp declines.
This comes as no surprise as it has been a roller coaster ride in the cryptocurrency market since the start of 2017. Many major digital currencies like bitcoin, ethereum, ripple etc reached new all-time highs and some have rallied in triple and quadruple digits.
Many cryptocurrencies have been on a tear this year and a correction was long overdue.
Petar Zivkovski, COO of Whaleclub, a leveraged cryptocurrency trading platform told CoinDesk that traders took this opportunity to capitalize on the excessive hype built around cryoptocurrencies over the past few days.
Many experts had concerns that cryptocurrencies are in a bubble and had stated that the price of these digital assets may have grown inflated.
The sudden spike in interest for buying bitcoin shows that the recent rally could probably be a result of a herd mentality trading which is now followed by a healthy correction.
Bitcoin had reached close to levels of USD 2,800 after news came that the community has reached a consensus with regards to the ongoing scaling debate and have agreed to enable the Segregated Witness (SegWit) to accommodate the increasing number of transactions.
Bitcoin has now corrected over 30 percent and is currently faring at levels of USD 2,000, as per the CoinDesk price index.
Bitcoin price chart:
Ethereum which rallied over 2500 percent this year, reached close to levels of USD 230 and has corrected over 30 percent from its all-time highs. It is currently trading at levels of USD 150, as per CoinDesk index.