Within a period of 24 hours, from October 11 to 12, the valuation of the crypto market has declined from $217 billion to $201 billion.
The 7 percent decline in the valuation of the crypto market was triggered by a sudden drop in the price of Bitcoin from $6,600 to $6,250.
The 5 percent decrease in the value of Bitcoin, which occurred in less than 30 minutes, was somewhat expected by traders who were concerned by the declining volume of the dominant cryptocurrency.
Earlier this week, cryptocurrency trader Don Alt stated that a large Bitcoin rally will be obvious in hindsight, due to the massive progress Bakkt and other major cryptocurrency-related businesses have made in recent months to legitimize and institutionalize the crypto market.
But, echoing the sentiment of many traders, he emphasized that a final shakeout is highly likely, given the low volume and poor technical indicators of BTC.
“The next big move will be so incredibly obvious in hindsight. Bulls have: 1) BAKKT coming 2) Increased legislative & institutional interest 3) Lows holding strong Bears have: I) Weakening 6k support II) Sell off stronger than rallies III) Missing final shakeout.”
Blockchain tech developer Danny Les explained that the sentiment attached to crypto has not been positive for many months and a relatively large shakeout for Bitcoin was unavoidable.
“The overall sentiment attached to crypto probably isn’t the most positive. Bitcoin effectively nosediving since last years ATH has created a steady wave of retail interest decline across all crypto markets,” Les said, adding “personally I suspect that there will be more blood before any kind of serious rally up.”
Yesterday, CCN reported that Naeem Aslam, chief market analyst at Think Markets UK, said Bitcoin needs a strong catalyst like the approval of an exchange-traded fund (ETF) to initiate a short-term rally.
The catalyst that could allow BTC to recover by the year’s end is unlikely to be a BTC ETF because the VanEck and Cboe ETFs are said to have the highest chances of being approved and the approval date of the two ETFs are in early 2019.
In the short-term, Bakkt, a regulated cryptocurrency platform created by ICE and NYSE will likely have the strongest impact on the price of BTC.
This week, Coinbase institutional head Adam White left the world’s biggest cryptocurrency brokerage to join Bakkt, to bring in retail traders and institutional investors into the cryptocurrency market.
White played a crucial role in establishing Coinbase’s professional exchange GDAX and institutional business to bring in investors from the traditional finance sector to crypto.
Analysts have stated that the recruitment of White by Bakkt demonstrates strong efforts of Bakkt and ICE/NYSE to strengthen the existing infrastructure in the market, which may lead investors to be more optimistic in the short-term trend of BTC.
BTC has a solid chance of initiating a swift recovery to $6,600, to its previous low point. But, technical indicators still demonstrate a poor price trend, as the market is not seeing oversold conditions or a sudden increase in demand in a low price range.
Featured Image from Shutterstock. Charts from TradingView.
Last modified: May 20, 2020 5:09 PM UTC