Coinbase as well as other major fiat cryptocurrency exchanges have seen Bitcoin dropping to a new yearly low of $3,456, right after the downward trend took over the market. Speaking of which, the latest crypto news show that BTC demonstrated a drop of over 12% and showed weakness in the short-term momentum.
The volume of BTC is in the focus, since it rose to $6.1 billion mostly due to an overwhelming amount of sell orders. The drop in price of the most dominant cryptocurrency remains a troubling sign for the short-term trend of the market since the sell-off was materialized with low volume.
One of the most popular traders and a prominent technical analyst, Peter Brandt, recently stated that Bitcoin entered a phase during which newcomers and casual retail traders capitulate while strong hands continue to accumulate more BTC. As he tweeted:
“BTC is entering the stage of its life cycle when stale and weak money capitulates and strong hands accumulate strategically.”
The abrupt decline of the US stock market and the impact on the global economy is another major factor subsequent to the fight between Bitcoin Cash and Bitcoin Cash SV – triggering a major sell off in markets such as China, South Korea and Japan and leading markets to suffer as a consequence of that.
At the end of the day, cryptocurrencies are still an asset class that is infant and has low liquidity and volume. In order for Bitcoin to operate as an inversely correlated hedge against the global financial market, it needs to achieve a multi-trillion dollar market valuation. Until this happens, cryptocurrencies are expected to be vulnerable to instability in the global economy – especially during periods of uncertainty and doubt.
Currently, the price of Bitcoin is trading closely below the $4,000 mark.
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