On August 8, the crypto market seemed to be improving, as Bitcoin rebounded to $6,600 and Bitcoin Cash hit $620.
However, over the past several hours, the major cryptocurrencies have started to demonstrate a decline in their momentum, as Bitcoin fell to low $6,300 and Bitcoin Cash fell below the $600 mark.
Lack of Momentum
Since July 29, the Bitcoin price has been on a free fall, dropping from $8,300 to $6,350 within a two-week period. Other major cryptocurrencies and tokens experienced a more steeper drop in the value, losing 30 to 40 percent of their price in merely 12 days.
Throughout the past eight months, since January, the cryptocurrency market and its most dominant cryptocurrency Bitcoin have seen similar trends and price movements play out, in identical ranges.
On February 6, the price of BTC dropped to $6,000, but recovered to $11,000 within a month. In April, the price of BTC fell again to the $6,000 region, in a period of 30 days. In May, BTC peaked at around $11,000, only to drop back down to $6,000 a month later. The price of Bitcoin has been moving in between $6,000 and $10,000 since January, as if large-scale investors in a market outside of the public cryptocurrency exchange market have been manipulating the price of BTC.
Based on the suspicious movement of BTC in that price range and the fact that the over-the-counter (OTC) market is two to three times larger than the cryptocurrency exchange market, it is difficult to dismiss the possibility of price manipulation.
Moreover, the drop in the price of BTC has always been timed exactly after an important piece of event or news, such as the disapproval of the Winklevoss Bitcoin ETF or the VanEck ETF, which on their own are evidently not sufficient to impact the cryptocurrency market in any major way.
If the price movement of BTC in the short-term plays out the same way as February, April, and May, BTC will likely fall below $6,000 in the upcoming days, possibly bottoming out at $5,700 to $5,800, as several analysts suggested. Successfully securing a support level at $5,800 could enable Bitcoin to climb up to major resistance level in the $7,000 and $8,000 region, in the mid-term.
As of current, the downward trend of the crypto market is overly strong and it is difficult to see a corrective rally being initiated in the short-term.
As Bitcoin continues to move in a downward trend, other major cryptocurrencies and tokens are expected to demonstrate a larger decline in their value. Some analysts have suggested that Coinbase may integrate Ripple (XRP) in the near future, but the market has seen similar rumors in the past, which never managed to materialize.
Given the hype around Ripple and EOS being added to Coinbase is increasing, it is likely that the market sees the price of XRP and EOS rise in the near future, but inevitably drop when Coinbase clarifies on its stance on the two cryptocurrencies, once again.
Featured image from Shutterstock. Charts from TradingView.
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Author: Joseph Young