Similar to the short-term trend outlined by CCN yesterday, the Bitcoin price has dropped by mid-$6,000 as it failed to demonstrate a recovery in its volume.
Yesterday, CCN reported that the volume of BTC and the rest of the crypto market have dropped substantially since late July, by more than 30 percent. Given the failed recovery of Bitcoin’s volume and the overly strong downtrend of the crypto market, CCN reported that the price of Bitcoin will likely drop to mid-$6,000.
“The overall demand for crypto has declined in the past several days and market activity has subsided. From here, if the volume of BTC fails to pick up and rebound to $4 to $5 billion in the next few days, a drop to mid-$6,000 is inevitable, which may play into to the prediction offered by BitMEX CEO Arthur Hayes last month,” CCN reported.
Factors and Trends
Many investors and analysts have attributed to the sudden decline in the price of BTC on August 8 to the decision of the US Securities and Exchange Commission (SEC) to delay the approval of the Bitcoin exchange-traded fund (ETF) of VanEck and SolidX.
Under normal circumstances, most analysts would have claimed that the delay of the VanEck-SolidX Bitcoin ETF was expected and the foreseen decision of the SEC to delay the approval of the VanEck SolidX Bitcoin ETF is simply not enough to trigger such a steep fall in the valuation of the crypto market.
However, in leading cryptocurrency exchange markets such as Japan and South Korea, so-called “influencers” and “traders” have been establishing a narrative around the VanEck and Cboe Bitcoin ETFs, boldly claiming that the Bitcoin price will achieve previous highs in August, upon the approval of the first Bitcoin ETF.
Especially, in South Korea, widely recognized traders and cryptocurrency researchers with hundreds of thousands of subscribers and followers on social media platforms such as Twitter, Facebook, and YouTube have been claiming that the SEC’s decision in August will lead to a large spike in the price of BTC.
It is possible, given the massive hype and false hope created by many of these influential traders and researchers, that the market overreacted to the delay in the approval of the VanEck-SolidX Bitcoin ETF.
It is also plausible that the decision of the SEC coincided with a large sell-off in the over-the-counter (OTC) market, which experts believe it to be at least two to three-fold larger than the cryptocurrency exchange market.
Lastly, another possible scenario is that a large group of bears, who have intended to sell-off a large chunk of BTC over the past few days, found a reason to do so with the decision of the US SEC and initiated a short-term panic sell-off.
Major Factor is Still ETF
All of the scenarios above are all both directly and indirectly affected by the decision of the US SEC and as such, it can be said with certainty that the delay of the VanEck Bitcoin ETF caused the price of BTC to fall.
However, as some analysts explained, if the rejection of a Bitcoin ETF can have such a large impact on the valuation of the crypto market, in contrast, the approval of a Bitcoin ETF can also have a massive positive effect on the mid-term price trend of major cryptocurrencies.
Featured image from Shutterstock. Charts from TradingView.