The cryptocurrency market rebounded after dropping below $344 billion, losing over $100 billion within the past week. Although major cryptocurrencies like Ethereum have recorded gains over the past 24 hours, most cryptocurrencies have started to fall again.
On March 10, bitcoin, Ethereum, and other major cryptocurrencies recorded over 10 percent in daily gains, triggering enthusiasm within the global cryptocurrency market. Ethereum in particular along with tokens increased by nearly 13 percent, while bitcoin recovered back to the $9000 region.
But, in the past several hours, bitcoin, Ethereum, and other cryptocurrencies have started to decline again, as the market continued to be volatile. Bitcoin has dropped below the $9,000 mark after reaching $9,500. In fact, within the past 3 hours, bitcoin has dropped $500, despite the momentum it gained throughout the past 24 hours.
Within a span of four days, bitcoin went from $11,600 to $8,300, increased to $9,400, and declined to $8,950. Bitcoin’s extreme volatility is reflected by the market, which has followed the volatile trend of bitcoin throughout this week.
Many analysts have attributed the decline in the price of bitcoin and the volatility of the market to the sell off of bitcoin by the Mt. Gox trustee. According to the official document released by the trustee, over $1.5 billion worth of bitcoin are yet to be sold.
The issue with the sell off is that the Mt. Gox trustee intends to sell the remaining bitcoin on cryptocurrency exchanges, rather than in the over-the-counter market. Massive sell orders can drastically impact the cryptocurrency market especially in a recovery period like this, when volumes are relatively low on most cryptocurrency exchanges.
There are optimistic developments being pursued in Japan, South Korea, and other regions that could significantly improve the adoption of cryptocurrencies like bitcoin and Japan in the mid to long-term. Today, CCN reported that South Korea’s largest internet conglomerate Kakao, which operates KakaoTalk, KakaoPay, KakaoTaxi, KakaoStory, Dunamoo (UpBit), and many other applications, plans to integrate cryptocurrencies by the end of 2018.
But, in the short-term, despite the innovative developments in the cryptocurrency sector, most cryptocurrencies including bitcoin will likely remain extremely volatile in the range of $9,000 to $11,000, until a major break occurs and the cryptocurrency market moves in an upward manner at a similar rate as December 2017.
Analysts are divided on the future trend of Ethereum and its performance against Ethereum. Some have claimed that bitcoin will likely remain as the best performing cryptocurrency as newcomers come into the market and invest in the dominant cryptocurrency first, before moving to other cryptocurrencies.
Some state that the performance of tokens could push the price of Ethereum up in the short-term, especially in a period in which all tokens are down about 50 percent from their all-time highs.
While it is difficult to predict the trend of cryptocurrencies in a highly volatile period, it is important to acknowledge the factors behind the decline and reasons as to why the cryptocurrency market is struggling, to evaluate the future trend of the market.
Last modified: May 20, 2020 9:01 PM UTC