Subsequent to the release of a major partnership with $80 billion banking giant Banco Santander, the price of Ripple (XRP) has declined by more than 8 percent.
In the past 24 hours, the valuation of the cryptocurrency market dropped by around $9 billion, as Bitcoin dropped below the $6,500 mark for the first time in the past seven days, recording a 2 percent decline in value.
Yesterday, on October 2, CCN.com reported that the low volume of Bitcoin is a concern for traders and it could negatively impact the short-term trend of Bitcoin.
“The volume of Bitcoin remains fairly low at around $4 billion, down more than 30 percent since mid-September. On Coincap, the cryptocurrency market data provider of popular digital asset trading platform ShapeShift, which eliminates exchanges suspected of having false volumes, the daily trading volume of Bitcoin is estimated to be around $2.6 billion,” the report of CCN.com read.
It would have been possible for the dominant cryptocurrency to engage in a short-term upside movement if its volume had rebounded by around 15 to 20 percent. But, throughout the past 24 hours, the daily trading volume of Bitcoin remained at $4 billion on CoinMarketCap and $2.77 billion on Coincap.io.
The volume of Bitcoin recorded a slight gain of around 1 percent, which had no notable effect on the short-term trend of the crypto market.
The sudden drop in the price of XRP after Swell 2018 conference also contributed to the downtrend of major cryptocurrencies.
In the crypto market, most digital assets tend to experience a pump prior to the release or materialization of a major announcement like a product release or a mainnet launch, and then fall by a large margin subsequent to the announcement.
As such, some investors expected the price of XRP to fall after the major announcement of Ripple Labs was released, but given the significance of RippleNet integration by Banco Santander and its OnePay FX mobile application, investors expected the momentum of XRP to continue.
The decline in the momentum of XRP and most major cryptocurrencies including Ethereum (ETH), Bitcoin Cash (BCH) and Stellar (XLM) will likely prevent the market from initiating a major short-term rally in the next 24 to 48 hours.
At this phase in the market, it is important for cryptocurrencies to demonstrate a gradual increase in volume to initiate a corrective rally in the days to come.
According to Bobby Cho, the global head of trading at Cumberland, a Chicago-based cryptocurrency trading unit of DRW Holdings LLC, the over-the-counter (OTC) market of Bitcoin has been quite active amongst high-net-worth individuals and institutions, which may have led Bitcoin to stabilize at a low price range.
“One of the biggest criticisms of crypto by institutional investors has been the volatility. Over the last four to six months, the market has been trading in a very tight range, and that’s seems to be corresponding with traditional financial institutions becoming more comfortable diving into the space,” Cho said.
If the demand for BTC continues to increase in the OTC market, it is possible that in the weeks to come, BTC experience recovery in its momentum and volume.
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Last modified: May 20, 2020 5:18 PM UTC