The cryptocurrency market has dropped $9 billion over the past 24 hours after demonstrating a $30 billion increase in valuation from $370 to $400 billion.
Bitcoin Struggle at $8,500
The bitcoin price has struggled to surpass the $8,500 mark on throughout May 14, even after surpassing $8,700 on May 13. The market started to recover as the bitcoin price rebounded to the $8,500 and tokens like Ontology (ONT) recorded gains in the 20 to 30 percent region, but the market failed to sustain momentum at the $400 billion mark.
In an interview with The Express, cryptocurrency analyst and researcher Matthew Newton stated that major banks have already invested heavily in cryptocurrencies like bitcoin and Ethereum, and the entire cryptocurrency market, echoing a similar stance as Steve Chiavarone, a portfolio manager at $364 billion investment firm Federated Investors.
In the short to mid-term, Newton emphasized that the entrance of banks could trigger institutional demand for cryptocurrency to rise, allowing the market to recover to its previous levels.
“Despite some initial posturing, the reality is most big banks have already invested significant amounts in research and development into blockchain technology and cryptocurrencies themselves. It will still take time for institutional investors to fully come around – and the fact that Goldman won’t be buying or selling actual coins suggest some scepticism remains – but there’s a growing acceptance that these assets are here to stay,” said Newton.
Many traders believe that the Blockchain Week in New York marked by the start of Consensus 2018 will help the bitcoin price recover and the market to rebound. Over the past week, the market has not been able to record any major movement on the upside and if the bitcoin price remains below the $8,500 mark, it is likely that other major cryptocurrencies and tokens will continue to slump throughout the week.
But, if bitcoin can secure the $8,800 support level and eye a move towards $9,500 by the end of the week, the cryptocurrency market could experience a surge in volume and inflow of new capital.
Already, the volume of the market has increased to around $21 billion, up by more than $5 billion since May 11. Depending on the volume, the bitcoin price could regain momentum and move towards the $8,800 mark or test the $8,000 resistance level in the short-term.
Several tokens such as Salt, Ontology, and Storm have been able to record major gains against both bitcoin and US dollar over the past week. Considering that tokens experience intensified movements on both the upside and downside, the value of most tokens will depend on the short-term trend of bitcoin and Ethereum.
With the bitcoin dominance index below 37 percent, it is evident that tokens and other small cryptocurrencies have started to outperform major digital assets. As the market conditions improve in the upcoming days, tokens like Ontology, Storm, and EOS that have strong volumes on major exchanges like Binance will likely perform well against bitcoin.