Since September 18, within six days, the crypto market added $34 billion to its valuation. After a massive short-term rally, Bitcoin has retraced slightly, leading other major cryptocurrencies to fall by 3 to 5 percent.
While Bitcoin recorded a slight loss of less than 1 percent, Ethereum, Bitcoin Cash, EOS, Stellar, and Litecoin demonstrated losses in the range of 3 to 5 percent, with IOTA recording the steepest decline amongst major cryptocurrencies.
The volume of Bitcoin, which remained above $5.3 billion up until September 22, fell back down to the lower end of $4 billion. The volume of XRP, the native cryptocurrency of Ripple, also fell below $1 billion mark to $800 million, after surpassing $2 billion at its weekly peak.
Bitcoin has shown stability throughout September, even during corrections. While Ripple and Ethereum recorded 30 to 110 percent increase in price over the past seven days, the two cryptocurrencies suffered massive losses throughout August, during a period in which Bitcoin remained stable in the low $6,000 region.
As such, when most cryptocurrencies dropped by more than three percent in the past 24 hours, Bitcoin recorded a mere 0.75 percent losses in value. A slight retrace in the valuation of the crypto market was expected by many traders, considering the sheer magnitude of the gains recorded by both major and small market cap cryptocurrencies throughout last week.
XRP demonstrated a three-fold increase in price, with Stellar and Cardano mimicking the short-term trend of XRP. Considering the large gains of cryptocurrencies throughout September, it is positive that the market has obtained a minor breathing room to strengthen momentum.
But, one concern in regards to the short-term price trend of cryptocurrencies is the low volume of Bitcoin. Within the past 24 hours, the volume of the dominant cryptocurrencies has dropped by more than 20 percent.
The substantial decline in the volume of XRP was expected because of its 130 percent increase in value. Still, the volume of XRP has dropped from nearly $2 billion to $800 million, by nearly 60 percent in a 48-hour period.
Due to the wild volatility of the crypto market in recent weeks, it is entirely possible for the volume of major cryptocurrencies to pick up and recover in the next 24 hours. It is also possible that the decline in volume is merely a minor retracement the market needed to stabilize after a major corrective rally.
As CCN.com reported, billionaire investor Mike Novogratz outlined $6,800, $8,800, and $10,000 as important resistance levels for Bitcoin. On September 23, Bitcoin came close to breaking out of the $6,800 resistance level but struggled in the higher end of $6,700.
In the next 12 to 24 hours, if the volume of Bitcoin can recover to mid-$4 billion and show some resilience above the $6,700 mark, it is likely that BTC tests $6,800 in the short-term. Although the daily chart of BTC shows a lack of momentum in the short-term, the weekly and monthly charts of BTC demonstrate optimistic mid-term price development.
Featured image from Shutterstock. Charts from TradingView.
Last modified: May 20, 2020 5:58 PM UTC