The cryptocurrency market has continued its selloff on Tuesday and declines are being seen across the board.
This has reduced the value of the entire market to US$304 billion according to Coin Market Cap, down a further 1.5% since this morning.
Whilst Bitcoin (BTC) and Ethereum (ETH) have dropped around 2% lower, one of the worst performers has been Bitcoin Cash (BCH).
The Bitcoin offshoot is down 5.6% since this time yesterday to US$893.60 per token, reducing its market capitalisation to US$15.3 billion.
This means that Bitcoin Cash has now fallen 26% since this time last week or a sizeable 38% in just the space of one month.
Why is Bitcoin Cash sinking?
There doesn't appear to be a single catalyst for Bitcoin Cash's sizeable drop. Instead, a combination of negative trader sentiment, significant selling pressure, and profit taking appear to be weighing on the alt coin's performance.
In respect to the former, recent reports of price manipulation in cryptocurrency markets has hit trader sentiment at a time when it was already very weak.
And in respect to the latter, the Bitcoin Cash price rallied strongly last month ahead of its Bitcoin ABC upgrade which increased its block size to 32MB. This allowed it to handle significantly more transactions than many of its peers and was supposed to increase its appeal for real world use.
Whilst this could still be the case one day, traders certainly aren't sticking around to find out. The Bitcoin Cash price is now close to the levels it was before the Bitcoin ABC bump took place.
What's next?
Until there is a positive catalyst that leads to an improvement in sentiment, I believe that Bitcoin Cash and its crypto peers will unfortunately continue their decline.
In light of this, I would suggest that traders resist the temptation to buy the dip and focus on other opportunities instead.
