A week does not go by in the world of cryptocurrency without some kind of drama. Examining the events of the past week and observing the trends of the crypto market, our weekly Market Wrap-up aims to keep you informed of the latest happenings in crypto, even if you’re not the type to peek at your Blockfolio on an hourly basis.
Stability… last week’s quiet, dulcet — some would say, boring market motions now offer traders comfort; fond memories of better times for those surviving the tumult of the past few days.
Out of nowhere a dramatic fall, an awakening of volatility, rearing its ugly head, startled the market into a panicked mid-week sell-off. Bitcoin suddenly dropped by hundreds of dollars, causing a widespread fall in the larger cryptocurrency market that saw Ethereum drop to lows not seen since the summer of 2017, before the rapid bull run of late last year. Interestingly, many altcoins saw large price drops while Bitcoin, despite falling a few hundred dollars, remained somewhat stable, even when compared to the traditional stock market crashes of the week.
An interesting correlation between traditional stock markets and crypto markets occurred, both falling by significant quantities in a similar time span. Theories abound regarding this correlation, such as the possibility that large quantities of crypto were rapidly sold off to “buy the dip” in traditional markets, for example. Normally, the two markets exhibit relatively little correlation, so it was a curious occurrence for many analyzing the scene.
Those hit hardest by this precipitous fall? Bytecoin lost the most over the past seven days, dropping more than 35% in value after it was announced it would be delisted on Binance, along with a few other less significant coins. Bytecoin was the definitive pump and dump coin when launched on Binance and still has not shaken its somewhat suspect reputation in this regard. However, it is strange that a top 30 coin like Bytecoin would be delisted nonetheless.
A few other coins saw sell-off patterns, likely attributed to the usual patterns of ebb and flow that occur over time due to buy and sell stop-limits. XRP, Holotoken, and Aurora, for example, had all seen considerable buying growth over recent weeks, and were therefore due for some selling.
Most concerning is the fact that overall trading volume is quite low as of now, revealing relatively low buyer interest and a lack of excitement in the market as a whole. Considerable uncertainty continues to swirl around Bitfinex and Tethers, especially now that Bitfinex has been pausing fiat deposits, appearing to attempt to move funds around with different bank accounts, most recently via a private HSBC account held by Global Trading Solutions. Traders have reportedly experienced some difficulties withdrawing funds from Bitfinex, contributing to the nervously uncertain sentiment. Bitfinex has been reassuring customers that things will “normalize” in a few days. Hmm.
On top of this, the vast majority of trading volume in cryptocurrency rests with Bitmex, a derivatives-based market that depends on highly-leveraged trading. Traders eager to experience the huge payoffs of yesteryear in Bitcoin are taking to high-stakes gambling on the much more risky leveraged trading frontiers where shorting Bitcoin can be just as profitable as owning the underlying Bitcoin asset used to be. In the meantime, most other trading volume is relatively low, indicating a lack of investment interest and a turn to purely speculative behaviour in the hopes of hitting it big.
On the positive side, a few projects managed to swim through the sea of red and continue upstream. 0x, the first ERC20 token to be listed on Coinbase, saw a positive response to the listing launch, although even this was somewhat muted by the negativity of the general condition of the market. Electroneum experienced a bit of a volatility joyride that saw it bouncing violently in price, most likely due to its relatively low liquidity on a limited range of exchanges. And Genesis Vision, a recent market favorite building anticipation with an impending launch, weathered the storm with a relatively small drop in price compared to the larger alt market.
Due to the low volume numbers and continuation of negativity and uncertainty in the market, it could be a while before the light becomes visible at the end of this bearish tunnel. Patience is an asset in these dark times.
It should be noted that all of these observations are just that — observations I have made about the market over the past week. This is not professional financial advice and is intended only to act as a quick wrap-up of the week’s events for you to enjoy. Please do your own research before doing any investing and never risk more than you can afford to lose.