Within merely 24 hours after recording massive gains and peaking at $450 billion, the cryptocurrency market has fallen, recording a minor correction. Major cryptocurrencies including bitcoin, Ethereum, Ripple, and Bitcoin Cash all fell by over 10 percent.
As CCN noted in yesterday’s report, in periods of extreme volatility, the vast majority of cryptocurrencies in the market tend to follow the trend of two major cryptocurrencies: bitcoin and Ethereum. This morning, the price of both bitcoin and Ether, the native cryptocurrency of the Ethereum network, fell by 10 percent, erasing gains made on February 10.
Ethereum peaked at $909 less than 24 hours ago, but throughout the rally, the daily trading volume of Ether across all major exchanges remained relatively low. Consequently, over the past 12 hours, the price of Ether declined from $909 to $793, stabilizing at $810. Given that Ether has experienced a steep decline in the past 24 hours, it is unlikely that the price of Ether would continue to decline unless it dips below $800.
The daily trading volume of Ether still remains low on major exchanges, and it is struggling to regain momentum.
Bitcoin has demonstrated a similar trend as Ether, dipping below $8,000 and falling to $7,950. Although it has gained back some of its losses, like Ether, it is testing the $8,000 region. Bitcoin also has low daily trading volume across major exchanges and thus, unless a short-term recovery is made, it is likely that the price of bitcoin will remain in the $8,100 region over the next 24 hours.
However, if bitcoin and Ethereum can recover swiftly in the short-term, as the price of Ether surged from $780 to $900 on February 10, both cryptocurrencies have the potential to rebound back to yesterday’s levels, especially if volumes can support their short-term momentum.
Earlier this week, Roc Nation, the company founded by Jay Z, the rapper, producer, and media mogul, invested in Robinhood, the US-based financial services company that is launching its cryptocurrency trading platform called Robinhood Crypto later this year.
Neil Sirni, the president of Arrive, a subsidiary company of Roc Nation, stated:
“We believe in Baiju and Vlad’s mission to make the financial markets more accessible and cost efficient for customers of all size. Robinhood will have our support as they execute the long-term vision of their company.”
The official statement of Roc Nation emphasized Robinhood’s mid-term plan of operating a cryptocurrency trading platform and its vision to improve the accessibility of the financial market.
If the global stock market continues to remain volatile and the cryptocurrency market recovers in the short-term as it did throughout this week, it is possible that investors in the traditional finance market could eye cryptocurrencies as mid-term investment to hedge against the global stock market.
Overall, the market is showing some signs of mid-term recovery but the demand for cryptocurrencies and daily trading volumes of the market are not supporting the movement. For strong momentum to build up, daily trading volumes of major cryptocurrencies across large-scale cryptocurrency exchanges must remain relatively high.
Featured image from Shutterstock.
Last modified: May 20, 2020 9:06 PM UTC