Despite the strong performance of bitcoin over the past 24 hours, tokens have recorded large losses against both bitcoin and the US dollar, dropping by 10 to 20 percent.
On July 22, CCN.com reported that the volume of bitcoin has dropped by more than 36 percent since July 20, within a 48-hour period, from $5 billion to $3.5 billion. The daily trading volume of other major digital assets and stablecoins including ether and Tether (USDT) also dropped by a similar margin, showing the lack of demand from investors.
However, in the past 12 hours, the volume of BTC surged from $3.5 billion to $4.9 billion, as a solid increase in price from $7,400 to $7,700 sparked interest in the market. The sudden increase in the value of BTC temporarily led some tokens such as Basic Attention Token (BAT) and Augur (REP) to rise substantially.
On July 22, REP rose by over 35 percent against both BTC and the US dollar, following a surge in volume from 70 BTC to 2,000 BTC on Binance, the largest crypto exchange in the global market. Over a span of 24 hours, the price of REP fell 15 percent from nearly 0.006 BTC to 0.00435 BTC.
Bitcoin and Bitcoin Cash have been able to secure momentum with a 2 percent increase in price, while the rest of the market fell significantly within a short period of time. Even tokens like 0x (ZRX) and Decentraland (MANA), which have performed especially well against bitcoin in the past week, fell by over 8 percent.
Aelf (ELF), Ontology (ONT), ICON (ICX), and Zilliqa (ZIL) fell to their monthly lows, regardless of the strong movement of bitcoin.
Often, tokens follow the movement of BTC and ether, with intensified movements on both the downside and upside. When BTC falls, tokens fall by a larger margin and when BTC surges, tokens increase substantially.
Throughout July, tokens have struggled to find momentum even throughout short corrective rallies of bitcoin, demonstrating a strange behaviour against major digital assets.
The disappearance of the correlated movements between tokens and major digital assets can be attributed to the tendency of investors in the cryptocurrency market of allocating their funds to bitcoin amidst a bear market, for stability and reduced volatility.
This week, Facebook and Google, two of the largest social media and advertising platforms, restored the ads of Coinbase, the biggest cryptocurrency brokerage and exchange in the global market.
Analysts have stated that the recovery of Coinbase ads by the two internet conglomerates have shown their intent to serve legitimate companies and crackdown on fraudulent operations such as scam initial coin offerings (ICOs) and token sales.
Acknowledging the good actors in the space and cracking down on businesses that rely on malpractices is an important step towards legitimizing and legalizing the entire cryptocurrency sector that could ultimately affect the value of cryptocurrencies in the long-term.
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Last modified: May 20, 2020 6:22 PM UTC