When many thought it couldn’t get much worse, it did, with Bitcoin recently falling by over $300 in the matter of an hour. As of the time of press, Bitcoin sits at the price of $6,050, following an influx of selling pressure, with the sell-side sentiment quickly cascading throughout the market.
On some exchanges, like the Europe-based Bitstamp, Bitcoin even spent some time under the $6,000 price level, as the order books on that exchange might have been too shallow to handle this influx of sell-side volume.
Altcoins followed Bitcoin’s move downwards and arguably had it worse than the foremost crypto asset, as Bitcoin’s dominance figure now shows. As per CoinMarketCap data, Bitcoin’s value now accounts for 49.4% of all of the cryptocurrency market, which is the highest this measure has been at in over six months. Out of all of the cryptocurrencies in the top 10, IOTA and Ethereum have posted the most substantial losses, losing 14% and 11% respectively in just a matter of hours.
With this most recent drop-off, many have begun to believe that Bitcoin’s recent recovery from $6,100 to $6,60 might have been a “dead cat bounce,” where an asset sees a sharp decline and subsequent recovery, but falls even further to lower lows.
As Bitcoin fell, some began to speculate the reasoning behind this seemingly unexpected move lower. As is the common theme these days, users brought up the SEC’s delay verdict on the VanEck-backed ETF. But as Joseph Young notes, the delay of a Bitcoin ETF should not have such a substantial effect on the market. He wrote:
“Why would the delay of a Bitcoin ETF, which was expected by the vast majority, lead the market to tank suddenly by a massive margin? When in fact news hasn’t been affecting crypto exchange market as seen in the case of NYSE/ICE?”
Why would the delay of a Bitcoin ETF, which was expected by the vast majority, lead the market to tank suddenly by a massive margin? When in fact news hasn’t been affecting crypto exchange market as seen in the case of NYSE/ICE?
OTC sell-off or just strong downtrend more likely.
— Joseph Young (@iamjosephyoung) August 8, 2018
Instead, Joseph noted that this is likely part of a stronger downtrend that will push the price of crypto asset lower for the time being.
On the other hand, Dan Morehead, the CEO of Pantera Capital, recently took to CNBC to note that this Bitcoin’s decline was an overreaction to the SEC news, rather than just a part of a downtrend.
The market has been in a tumultuous state for months, with the price of cryptocurrencies going through the motions on a near-daily basis. As we move closer and closer to the end of 2018, it has become increasingly apparent that the bullish predictions made by Arthur Hayes and Tom Lee may not come to pass.
But some still hold on to the hope that the cryptocurrency industry is set for longer-term growth, as Dan Morehead drew attention to the Intercontinental Exchange’s foray into the industry, stating:
“This is huge news… This will have a very profound impact over the next five or ten years for the markets and in my mind, that’s what people should be focused on.”