In the past 24 hours, the valuation of the crypto market has dropped slightly by $2 billion, from $215 billion to $213 billion, as the Bitcoin price and Ethereum price demonstrated stability.
Most major cryptocurrencies including Bitcoin Cash, Ripple, EOS, and Ethereum recorded decent gains in the range of 1 to 5 percent.
Tokens including VeChain, Ontology, and DigixDAO, which fell by more than 20 percent against both Bitcoin and the US dollar on August 18, recovered relatively quickly, recording 15 percent gains to overcome yesterday’s losses.
Earlier this week, on August 17, VeChain, Ontology, DigixDAO, Nano, 0x, BAT, and other tokens recorded some of their strongest performances against Bitcoin. VeChain and Ontology in specific rose by over 70 percent against the US dollar, recording 30 to 60 percent gains against Bitcoin and Ethereum.
But, on August 18, the prices of tokens plunged, possibly due to the overreaction from investors to a minor corrective rally that led the bitcoin price to increase from $5,850 to $6,400.
Cryptocurrency trader and FX market maker trading analyst Alex Kruger suggested that investors overplayed their hands during a short-term recovery that was triggered by strong oversold conditions demonstrated by the crypto market.
He emphasized that while the corrective rally of Bitcoin was largely beneficial to the market as it provided breathing room for other major cryptocurrencies and tokens, the successful breakout of the $6,000 mark by BTC did not mark the start of a proper rally.
“BTC was rejected at $6,600 and the whole crypto complex fell like a house of cards (-10%/20% this morning). A strong bounce out of massively oversold levels does not indicate a new bull run has started,” Kruger said.
In previous drops to the lower end of $6,000, Bitcoin successfully bounced back, eventually testing the $10,000 mark. Bitcoin had breached the $6,000 mark three times in the past eight months but also tested the crucial $10,000 resistance level equal times.
Several analysts have theorized that the minor corrective rally of Bitcoin and the rest of the market could lead the dominant cryptocurrency to test the $9,000 resistance level in the near future, initiating a strong short-term rally.
However, it is important to the market that tokens and even major cryptocurrencies do not record absurdly massive spikes like VeChain’s 80 percent gain against the US dollar on August 17, as without stability and limited volatility, a minor bubble could form again that could potentially prevent the bitcoin price from testing major resistance levels in the following months.
Earlier this week, CCN.com reported that Pantera Capital, one of the two billion dollar hedge funds in the crypto market apart from Digital Currency Group’s Grayscale, has raised $71.445 million from 90 investors and is in progress of finalizing its $175 million “Third Venture Fund.”
Both Grayscale and Pantera Capital have said in their reports that institutional and retail trader demand has not declined throughout the bear market, which is an optimistic indicator that will large impact the performance of the crypto market in the latter half of the year.
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Last modified: March 4, 2021 3:56 PM