On April 9, the bitcoin price recorded a minor drop from $7,100 to $6,700, by around 4 percent. The $400 drop in the bitcoin price was not expected by investors.
Yesterday, various technical indicators and momentum oscillators pointed toward short-term stability for bitcoin. The relative strength index (RSI) and Williams’ Percent Range (WPR) demonstrated significantly oversold conditions, as the RSI neared 30 and WPR remained relatively high at 75 percent.
Despite the oversold condition in the bitcoin market, bears continued to push sell volumes across major cryptocurrency exchanges, leading bitcoin to record a slight drop in value. Traders were anticipating the $6,500 resistance level closely, as breaking that mark could have led the price of bitcoin to near the $6,000 mark.
The bitcoin price recorded a bounce at $6,610, rising by more than $100 and leaving the opportunity to recover back to the $8,000 region within April open.
Fundamentally, bitcoin remains strong, with increasing adoption in regions like the US, Japan, and South Korea. Institutional investors, who have not been interested in the cryptocurrency market throughout the entirety of 2017, have started to enter the cryptocurrency sector.
This week, it was revealed that $8 billionaire George Soros and his fund, Rockefeller family and its venture capital firm Venrock, and the Rothschild family have started to invest in the cryptocurrency sector. In an interview with Fortune, Venrock partner David Pakman stated that the family is interested in investing in the cryptocurrency space for long-term profits, not short-term gains.
“We wanted to partner with this team that has been making investments and actually helping to architect a number of different crypto economies and crypto token-based projects. There are a lot of crypto traders in the market. There are a lot of cryptocurrency hedge funds. This is different. In fact, to us, it looks a little bit more like venture capital,” said Pakman.
Analysts and media outlets in the traditional finance sector have attempted to justify the recent price movement of bitcoin with irrelevant news such as Bank of America Merrill Lynch describing bitcoin as a bubble. However, bitcoin and the rest of the cryptocurrency market are not dependent on these events as much as they were in its early phase in 2013.
Four years ago, the comment of JPMorgan CEO Jamie Dimon on bitcoin led the price of the digital currency to fall by a significant margin. Since then, every imaginable financial institution and analyst have condemned bitcoin, and such statements no longer affect the price of bitcoin negatively.
The cryptocurrency exchange market is more liquid than most regional stock markets, and the market moves by supply and demand. Currently, the volumes on most major cryptocurrency exchanges are low, and the low volume is the primary reason behind the current bear cycle of the cryptocurrency market.
Once volumes begin to pick up as the over-the-counter (OTC) market continues to prosper, the price of cryptocurrencies will be able to recover.
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Last modified: May 20, 2020 8:53 PM UTC