Why Did Crypto Market Experience a $27 Billion Wipeout? Experts Discuss Factors

On November 15, within a 24-hour span, the valuation of the crypto market fell from $210 billion to $183 billion, by more than $27 billion on a single day.

On CNBC's Fast Money, Brian Kelly stated the confidence of investors in the cryptocurrency market declined ahead of the Bitcoin Cash hard fork and its civil war with Bitcoin SV:. "After some real quiet period, lowest volatility, almost in Bitcoin history, all of the sudden today things exploded, so what happened? Bitcoin Cash, which forked off of Bitcoin last year, is doing a hard fork. Now, when you do a hard fork, everybody usually agrees. But in this particular case, everybody is not agreeing. So we've got ourselves a crypto civil war, and that has people in the market concerned."

Following a $27 billion drop in valuation in a 24-hour period, the crypto market could require weeks to months of consolidation period before initiating a proper short-term rally.

The uncertainty in the market has allowed the crypto market to weaken, Crypto Rand explained, adding that many alternative cryptocurrencies performed relatively well against Bitcoin.

"The crypto market still looking weak at this point. Uncertainty I would say is the main feeling right now. As seen by the low volumes everywhere, big traders and investors are still hesitant towards taking big positions given this scenario. One thing I would like to highlight is the response of large market cap cryptocurrencies against this BTC drop. In previous scenarios, all major digital assets were dragged down with BTC or dropping even further. But this time most of them are holding their levels nicely. This is a great precedent for the whole crypto sphere, alternative cryptocurrencies need to set their own path and cycles besides BTC moves."

According to Crypto Rand, one positive takeaway from the correction is that cryptocurrencies have started to show independent price movements with less dependence on BTC. In the weeks to come, it is possible that the market sees a decline in the dominance index of BTC, especially if large market cap digital assets begin to perform better.

On November 13, before the market demonstrated signs of a major sell-off, Woo stated that technical indicators show a weak short-term trend for BTC. "This last reading of our blockchain and macro market indicators is still in play. What has changed is that NVTS has now broken its support, typically a sell signal."

While the recent market crash has led retail investors and individual traders in the public cryptocurrency exchange market to panic sell and drive the market down further, Gurbacs said that institutional investors are focusing on products that provide investor protection and strengthen the infrastructure of the crypto market.

"Large financial institutions are more focused on proper market structure than short term price fluctuations. How do we properly value digital assets? How do we custody digital assets? Are their ETFs available with proper market and investor protections? Most large institutions do not really care if Bitcoin ends 2019 at 3,000 or 10,000. I think market structure is getting better every day and crypto start to look more and more like the commodities and equities markets."

Gurbacs shared the sentiment of BKCM CEO Brian Kelly and Coinshares executive Meltem Dem, stating that the Bitcoin Cash hard fork on November 15 and the hash power war between Bitcoin Cash and Bitcoin Cash SV contributed to the $27 billion drop of the crypto market.