On July 31, the price of bitcoin fell by 4 percent, from $8,150 to $7,800, as both major cryptocurrencies and small market cap tokens plummeted in value.
Within hours after its 4 percent drop, the price of bitcoin rebounded from $7,800 to $8,150, demonstrating an instantaneous recovery from its relatively large drop. However, other major digital assets and tokens failed to recover, falling by large margins against both bitcoin and the USD.
On July 30, CCN noted in its report that the value of bitcoin is likely to drop from the $8,150 possibly down to the higher end of $7,000, due to the instability in the market.
“If BTC fails to maintain its volume and falls below the $8,100 mark, it is possible for BTC to test a major support level at $8,000 and eye a drop below the $8,000 mark. If BTC finds stability in the lower end of the $8,000 region, a short-term bottom will likely be found at $8,000, with expected recovery to $8,500,” the report of CCN read.
As expected, the price of bitcoin fell below the $8,000 mark, but the rapidly recovery of bitcoin from the $7,800 level was not foreseen by the majority of traders, as it occured in such a short period of time.
Some investors, including Peter Brandt, have stated that in the mid-term, a price surge to $9,400 is a possibility for BTC, after a possible pullback in the upcoming days. Given that BTC has tested the $10,000 two times in the past three months, a movement to the mid-$9,000 region is a plausible scenario.
It is also important to acknowledge the movement of funds from other major digital assets and small market cap tokens to BTC, demonstrated by the lack of volume and momentum showed by most cryptocurrencies.
Tokens like WanChain, Decentraland, Ontology, and ICON, which have recorded strong performances against BTC upto June, have fallen by nearly 30 percent against both BTC and the US dollar since early July.
Even EOS, a $7 billion blockchain protocol backed by billionaire investors such as Peter Thiel and Mike Novogratz, has fallen by more than seven percent over the past 24 hours, despite the quick recovery of BTC from the $7,800 level.
Based on the lack of confidence of investors in the short-term trend of the cryptocurrency market as shown by the poor performance of alternative cryptocurrencies, a pullback is most likely. If the current trend continues, the price of BTC will likely drop below the $8,000 mark again in the next few days.
Tokenized securities blockchain project Polymath has surged by 40 percent overnight after the listing of Binance. For many months, Polymath has found demand from investors on OKEx and other major platforms, but struggled to sustain its movement due to its lack of presence on Binance. While a drop in the near future is expected due to the lack of momentum in BTC and the cryptocurrency market, Polymath experienced a larger surge in price than investors expected.