On August 1, the valuation of the crypto market fell to $270 billion as the price of Bitcoin declined by more than 7 percent from $8,300 to $7,500.
Over the past 24 hours, Bitcoin and other major digital assets have slightly rebounded, adding $3 billion to the valuation of the crypto market. However, the expected short-term recovery from yesterday’s $30 billion drop failed to add a significant amount of volume and demand to the market, and another drop is more likely than a recovery in the next few days.
On July 27 and throughout the past week, prior to the abrupt drop in the price of Bitcoin and Ether on August 1, the volume of Bitcoin, Ether, EOS, Bitcoin Cash, and Ripple remained relatively high with Bitcoin maintaining its $5.5 billion daily trading volume.
In the past 48 hours, Bitcoin lost $1.3 billion in daily trading volume while Ether’s volume declined by more than 20 percent. Interestingly, the volume of Tether (USDT), which tends to rise in a period of extreme volatility and uncertainty, has also declined, suggesting that the overall demand for crypto has fallen in the short-term.
In consideration of the low volume of Bitcoin and the poor performances of tokens such as Polymath, Waltonchain, and VeChain that recorded large gains against Bitcoin in early July, a recovery beyond the $8,000 mark in the next few days is difficult to envision, especially since its slight recovery earlier today failed to even test the $7,800 resistance level.
Previously, experts including BitMEX CEO Arthur Hayes suggested that another short-term correction is due before Bitcoin and the crypto market engages in a major bull rally. It is possible that the recent downturn of Bitcoin could result in a short-term correction to help the market find stability at a lower price range.
Paolo Passeri, a cryptocurrency researcher, said in an interview with Express that the security breach of KickICO in late July demonstrated glaring issues in the initial coin offering (ICO) market and the uncertainty of investors towards tokens. He stated:
“Another week, another crypto company falling foul of hackers. Last Friday, ICO platform, KickICO, became one of the latest businesses to suffer a breach when 70 million KICK tokens were stolen. At the time of the attack, this quantity of tokens amounted to a cool $7.7 million, which was lifted from a number of wallets across the platform.
Until the crypto market engages in a proper mid-term rally and finds stability, Passeri emphasized that security breaches and negative events surrounding the ICO market will have an impact on the price of Ether and tokens in general.
“Although the breach was detected and further damage prevented, it doesn’t lessen the concern caused by the hijacking of the private key. Instances like this confirm to threat actors that security is still not being seen as a priority among crypto startups – a very dangerous oversight,” he added.
Featured image from Shutterstock. Charts from TradingView.
Last modified: March 4, 2021 4:06 PM