Is Bitcoin’s Price Drop a Technical Correction?

Mati Greenspan, senior market analyst at eToro, framed the CoinRail incident as a trigger rather than a structural blow. "Though the CoinRail hack may have set us off-track, I don't think that this will have very significant ramifications in the long run," he said. "The industry has certainly seen much bigger hacks before and other than a technical price level, this doesn't change much for the path of the industry over the next five years."

Greenspan pointed to cryptocurrency infrastructure still under construction. Major capital waits on the sidelines for emerging crypto markets to gain momentum. "Some very big investors stand ready to enter the market. However, they will most likely wait until an upswing to join in." Whether that shift happens within a week or a year, he couldn't say. Timing is the only variable.

Matthew Newton, also an analyst at eToro, pinpointed where the move came from. The CoinRail hack may have sparked an initial dip, but the sharp decline hit hours later, around 6pm BST, when volume spiked. "Currently there is no indication of what caused this, but it certainly seems to have accelerated the drop," Newton said. A single large sell order may have hit the market.

Newton sees signs of maturity in crypto markets. Institutional investors turn their attention to the space, and blockchain entrepreneurs and technologists form communities. "Recent institutional interest should continue to develop as they educate themselves about the market," he said.

Bitcoin's collapse on the day coincided with the EOS blockchain mainnet launch. EOS had posted modest gains ahead of the event but then retreated. Most altcoins moved in lockstep with bitcoin.