Bitcoin’s price hovered within a narrow range on Sunday, as plunging trade volumes kept rally caps in check following a rocky end to the previous week.

BTC/USD Update

The bitcoin price fluctuated within a $70 range on Sunday, reaching a high of $6,3399.30 on Bitfinex. At the time of writing, BTC/USD was valued at $6,368 for a gain of 0.6%.

 

Narrow price action was accompanied by a sharp drop in trading volumes, with market turnover approaching the lowest level of the year. Over the last 24 hours, bitcoin’s trade volume on exchanges has declined by 25% to $3 billion, according to CoinMarketCap. That represents roughly one-third of total market turnover. BitMEX, a derivatives market, processed 16% on bitcoin’s trade volumes on Sunday. Bithumb saw nearly 5% of the daily turnover.

Since falling to the low $6,200 range on Thursday, bitcoin’s price has been slowly tracking upwards. A firm price bottom near $6,000 suggests that the path of least resistance is higher in the short term.

At current prices, bitcoin has a total capitalization of $109.2 billion, accounting for 54% of the entire market. The combined market value of all digital currencies is holding steady above $202 billion, based on latest available data.

Bitcoin Market Maturing

Despite the recent bout of selling pressure, bitcoin has established a fundamentally sound price floor and is exhibiting significantly less volatility than previous market cycles. This is not only corroborated by the bitcoin volatility index, which is currently tracking near yearly lows, but in earlier research published in a high-profile journal called Chaos: An Interdisciplinary Journal of Nonlinear Science.

In a study titled “Bitcoin market route to maturity? Evidence from return fluctuations, temporal correlations, and multiscaling effects,” Polish researchers examined bitcoin’s price action over a six-year period. Although they spotted irregularities early on, the researchers concluded that bitcoin’s “rates of return fluctuated according to the inverse cubic law,” which is a method of analyzing a market’s maturity. This means cryptoassets like bitcoin are increasingly behaving like mature markets such as stocks, commodities and fiat currency.

Bitcoin’s maturity was “particularly evident in the last six months of the examined period” between November 2017 and April 2018. As Hacked previously reported, the launch of bitcoin futures last December has had a stabilizing impact on the market despite arguments to the contrary by the Atlanta Federal Reserve and others.

Against this backdrop, it is reasonable to assume that bitcoin’s price action will show a greater tendency of following established technical patterns now that the market has a longer historical precedent. While this could mean lower prices for longer, a maturing and stabilizing market is positive in the long run.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Cryptocurrency prices were little changed on Saturday, as investors shifted to the sidelines following a brisk technical selloff that knocked $20 billion off market values.

Market Update

The combined value of all cryptocurrencies in circulation continues to hover near $202 billion, according to CoinMarketCap. Values plummeted more than $20 billion last week to a low of $196.9 billion. The selloff had no apparent fundamental drivers, a sign that technical re-positioning was the likely culprit.

Bitcoin was down 0.4% compared with 24 hours ago to trade at $6,278. The leading digital currency plunged more than 6% on Thursday to reach new three-week lows. As the author previously noted, bitcoin usually declines heavily in the ten days before the CBOE XBT futures expiry. The current contract is set to expire Oct. 17.

In terms of other major assets, Ethereum edged up 0.7% to $199 on Saturday after declining sharply in the latter half of the week. Bitcoin cash, EOS and Stellar XLM were little changed.

Tepid price action was accompanied by a sharp drop in trade volumes. Total market turnover on digital currency exchanges plunged 30% compared with Friday, with the top-three exchanges recording declines of at least 28%.

In terms of adjusted volume, Bitfinex has fallen out of the top-five exchanges and into the no. 14 spot after the exchange temporarily halted fiat deposits. The company issued a statement informing traders that the issue would be resolved within the week. It failed to provide any reason for the abrupt closing of fiat deposits.

World Bank’s Positive Take on Blockchain

World Bank President Jim Yong Kim believes blockchain technology has “huge potential” to transform the banking system. Speaking at the IMF World Bank’s annual meeting in Bali, Indonesia on Thursday, Kim acknowledged there are innovations in technology that can help traditional finance “leapfrog generations of bad practice, generations that would take forever in terms of reducing corruption.”

The World Bank issued the first blockchain bond in August – a practice that involved, creating, allocating and managing the entire bond issuance process through distributed ledger technology. ‘Bond-i,’ which stands for Blockchain Operated New Debt Instrument, was administered in Australia and raised more than $80 million.

As Hacked reported two weeks ago, Austria became the first country to issue government bonds on the Ethereum network. A total of  €1.15 billion worth of bonds was issued in the first week of October, according to local news agency Kleine Zeitung.

Blockchain technology is not only boosting transparency, it is helping organizations reduce costs and paperwork. These efficiency gains are likely to spearhead wider adoption of distributed ledger technology within banking and government circles despite existing apprehension over cryptocurrencies.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Bitcoin experienced a quick and painful pullback on Thursday, as the leading digital currency failed to assert itself as an alternative safe haven following a series of massive selloffs on Wall Street and in global markets. That said, BTC appears to have regained its footing after successfully defending a key technical and psychological support.

BTC/USD Update

After falling to the low $6,200 range on Thursday, the bitcoin price has rebounded to $6,310 on Bitfinex. That represents a 24-hour gain of 0.9%. The leading digital currency touched an intraday high of $6,353.40.

Bitcoin was down more than 6% at its lowest point Thursday but continued to defend the critical $6,000 support. This region has proven time and time again to be the minimum threshold market participants are willing to accept for BTC.

After peaking at $5 billion on Thursday, overall trade volumes in BTC is back down to around $4.1 billion, according to CoinMarketCap. At current values, bitcoin has a total capitalization of $108.9 billion.

Digital Gold?

The yearlong downturn in crypto prices has bitcoin struggling to live up to its status as ‘digital gold’ even as global stock prices tank. Over the last two days, the Dow Jones Industrial Average has sold off 1,378 points to reach its lowest level in over three months. On Wednesday, Wall Street recorded its worst single-day drop since February.

Asian markets have experienced even bigger losses, with Chinese stocks falling to their lowest in two-and-a-half years. The global selloff has pushed the price of gold back above $1,200, as traditional haven plays attracted new buyers.

To be sure, bitcoin’s moves are not correlated with the broader market and the two-day plunge in equities are not responsible for the sudden collapse in BTC. Bitcoin’s ability to move independently of the broader market is one of its most attractive features as a safe haven. It means that investors can hold BTC and not worry about its price being influenced by things like monetary policy, economic data, bond yields or Wall Street speculation.

While bitcoin has been unable to demonstrate its safe haven appeal to new buyers amid the market downturn, the digital currency remains a trusted store of value at a time when developers are looking to scale its use in the payments arena. At the same time, being ‘non-correlated’ does not equate to ‘inverse correlation,’ which means investors shouldn’t expect bitcoin to rise just because the stock market is falling or vice versa.

There was no fundamental catalyst behind bitcoin’s decline on Thursday, which means technical re-positioning and prevailing sentiment continue to drive market prices lower. At the same time, bitcoin typically falls into expiration of the CBOE XBT futures contract, which makes price action especially volatile ahead of the close. As Fundstrat’s Tom Lee pointed out, “overall, bitcoin has fallen 18% in the ten days prior to CBOE contract expiration.”

While the major cryptocurrencies experienced an oversold bounce in Asian trading today, the key technical breakdowns in the segment are intact. The top altcoins extended their losses before the bounce, but Bitcoin held up relatively well again, avoiding a test of the $6000 level and staying well above the key long-term support zone that might be in focus in the coming week.

ETC/USD, 4-Hour Chart Analysis

Some of the weakest coins, like Ethereum Classic, NEO, and IOTA are already trading below or at their previous bear market lows, but the majority of the largest digital currencies are still above the lows, keeping the hope of a higher swing low or a successful test of the lows alive. That said, the longer-term bearish trends are clearly dominant, and without signs of stability and bullish momentum, traders and investors should still stay away from new positions, since odds favor the continuation of the bear market.

BTC/USD, 4-Hour Chart Analysis

Although Bitcoin showed encouraging stability in the face of the broad selloff, it remained stuck below the primary resistance level at $6275, and it is still on a short-term sell signal in our trend model following the breakdown from the broad triangle pattern.

While the long-term setup is neutral, the coin is likely to test the crucial zone near $5850 in the coming weeks, especially if altcoins hit new bear market lows, and a break below that zone could trigger another round of liquidations in the segment. The next major support zone below $5850 is found between $5000 and $5100, while further resistance is ahead at $6500 and $6750.

Ripple’s Surges Off Support But Break-Out Still in Danger

XRP/USDT, 4-Hour Chart Analysis

Ripple has been the most volatile among the major altcoins in the last couple of days, and yesterday the coin fell all the way to the weak $0.375 support level before bouncing back hard. XRP has been testing the key $0.42-$0.46 zone today in early trading and it got close to the declining trendline that defined the triangle consolidation pattern of the past two weeks.

Despite the wild moves, the technical setup is basically unchanged, and the coin remains on a short-term sell signal and neutral long-term signal in our trend model. Above the primary resistance zone, further levels are ahead at $0.51, $0.54, and $0.57, while the next major support zone is found near the $0.35 price level.

ETH/USD, 4-Hour Chart Analysis

Ethereum remained relatively weak after the recent breakdown, getting very close to hitting the $180 support level yesterday, and although the bear market low near $170 hasn’t been in danger yet, the short-term setup is still shaky.

Given the strongly negative long-term trend, and the lack of bullish momentum traders and investors still shouldn’t enter positions here, with the short- and long-term sell signals being in place in our trend model. The next major support zone is found near the $160 level, while strong resistance is ahead at $200, $235, near $260, and between $275 and $280.

LEAVE A REPLY

Please enter your comment!
Please enter your name here