Bitcoin Price Falls to 5-Day Low Following Fork Currency Creation

Bitcoin prices fell following the creation of an alternative based on its blockchain, and expectations for how it would impact markets.

AccessTimeIconOct 24, 2017 at 1:45 p.m. UTC
Updated Sep 13, 2021 at 7:04 a.m. UTC

The price of bitcoin fell to a five-day low today, though the reasons why are perhaps complex to unpack.

At press time, the bitcoin-US dollar (BTC/USD) exchange rate is $5,710, up from a daily low of $5,560. As per CoinMarketCap, week-on-week, BTC is up 3.3 percent, while on a monthly basis, it's up 55 percent.

However, if you're looking for a culprit for the dip, industry observers are so far pointing to the creation of bitcoin gold yesterday.

A new cryptocurrency cloned from bitcoin, bitcoin gold is now in the process of "forking" to a new blockchain (with new rules), a process by which the bitcoin blockchain is copied and new digital assets are distributed to existing bitcoin owners.

As put forward by analysts including Blockchain Capital's Spencer Bogart, a former head of research and Needham and Co., the decline could be a sign investors are moving money to alternatives now that bitcoin gold has initiated the fork. Bogart's argument is that bitcoin rallied ahead of the launch in anticipation that holders would be credited with bitcoin gold.

However, it's unclear whether this could be the case. As the new cryptocurrency was not yet distributed, investors may have simply switched out of bitcoin positions on the basis further sell pressure is ahead on the distribution.

But, while it's too early to tell, the next question is simply, is the pullback in bitcoin over?

Price action analysis suggests a potential for further losses.

Daily chart

CoinDesk - Unknown

Bitcoin gold aside, the retreat from the record highs above $6,100 can also be credited to overbought technical conditions, and in this light, considered to qualify as a healthy correction.

The chart above shows:


The doors are open for a drop to $5,280 levels. Only a daily close below $5,280 would signal the rally from the September low of $2,980 has topped out above $6100 levels.

Bullish scenario - A move above 5-day moving average level of $5,950 could yield a re-test of record highs above $6,100.

Plastic forks via Shutterstock


Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.


CoinDesk - Unknown
La caída de las criptomonedas podría continuar debido a la complejidad del sistema, dice Deutsche Bank

Como bitcoin y otros activos son de alto riesgo y especulativos, se ven afectados de manera desproporcionada por los ajustes de la Fed, según un informe.

CoinDesk - Unknown
CoinDesk - Unknown
CoinDesk Industry Group Select Equal Weight Index (DIGS)
CoinDesk - Unknown
CoinDesk - Unknown
Digital Pseudonyms: One More Way to Make Working From Home Secure

A system of pseudonymous digital credentials would benefit organizations and ensure individuals control their personal data.

CoinDesk - Unknown