Over the past 24 hours, tokens including Digibyte, Aelf, Polymath, and 0x have rebounded, pushing the valuation of the crypto market to $258 billion.
Both Bitcoin and Ether, the native cryptocurrency of Ethereum, recorded a two percent increase from yesterday’s price range, as Bitcoin rebounded to $7,160 and Ether reached $413.
However, in the past several hours, the price of Bitcoin and Ether have started to drop once again, testing $7,100 and $410. If the volume fails to recover in the next 12 hours, Bitcoin and Ether will likely breach the $7,000 and $400 levels in a similar way as they did on August 5.
Ever since July 24, when the price of Bitcoin reached $8,500 with a huge spike in volume, the volume of the crypto market has struggled to recover and demonstrate any sort of momentum.
Today, the volume of Bitcoin dropped to $3.7 billion, which it has not seen since July 21. The volume of Ether, at around $1.4 billion, has dropped by 50 percent since mid-July, from around $3 billion.
While the volume of Bitcoin and Ether, the two most valuable cryptocurrencies in the global market, have dropped substantially within a two-week period, the volume of Tether (USDT), a stablecoin whose value is hedged to that of the US dollar, has surged, suggesting that investors in the global cryptocurrency market have been hedging the value of their holdings to the US dollar.
Often, when the volume of Bitcoin and Ether drop and the volume of Tether spikes up, the market tends to record a short-term correction. In the next 24 to 48 hours, if the volume of Bitcoin remains at its current level, the price of BTC will likely drop below the $7,000 mark and eye a downward movement to the mid-$6,000 region.
As CCN.com previously reported, while the cryptocurrency sector has seen some of the most positive developments and news pertaining to the adoption of major digital assets, as seen in the focus of the New York Stock Exchange (NYSE), Starbucks, and Microsoft to improve the usability of crypto, the market itself has been performing poorly.
It is plausible that despite the positive developments in the cryptocurrency and blockchain industries, a large sell-off is occuring in the over-the-counter (OTC) market, which take some time for the public cryptocurrency exchange market to reflect. `
Some analysts have expressed their concerns regarding the ability of the OTC market and large investors in it to manipulate the cryptocurrency exchange market, leading retail or individual investors to lose out on fabricated price movements.
The low volume of the crypto market is a worry for short-term investors and throughout this week, if BTC fails to rebound to its previous resistance level in the higher range of $7,000, BTC will likely continue to fall based on the current trend.
Featured image from Shutterstock. Charts from TradingView.
Last modified: May 20, 2020 6:09 PM UTC