After recording the steepest daily drop in valuation over the past few years, the crypto market has been struggling to rebound in a convincing manner. This is what pushed the dominance index of Bitcoin to 55%, making Bitcoin tokens more than half present in the entire crypto world.
The 55% dominance index of Bitcoin is the highest point that the major cryptocurrency sees since December 2017. As the tokens lost out largely against the largest cryptocurrency by market cap, BTC’s index increased over the past few days from 51% to 55%.
A lot of people are confident that the crypto market did not experience a drop below $200 billion – or near the yearly low of $192 billion. However, it is safe to say that Bitcoin, Ethereum and most of the top altcoins recorded a steep downward trend with little to no support in the mid $6,000 margin.
The good thing is that Bitcoin rebounded from its bottom of $6,000 and is now trading around the $6,450 margin. What we can all learn from this price impact is that the Goldman Sachs announcement had no impact on the short-term price of BTC, but definitely seemed like a negative development for the overall cryptocurrency sector.
Even the chief of Goldman Sachs, Martin Chavez, refuted the reports that Goldman Sachs was the one to blame for the drop, with the delay of their Bitcoin trading operations. As he said during a TechCrunch conference:
“I think one of the wonderful things about us is that we get written about a lot. I never thought I would hear myself use this term but I really have to describe that news as Fake news.”
Right now, if Bitcoin fails to break out of the $7,000 resistance level in the next 24 to 48 hours and completely reverse its fall from the $7,400 mark, it is highly likely that the most dominant cryptocurrency will test the $6,000 resistance level – just like it did in April, June, and August.
The drop to $6,000, however, is not necessarily negative, as it would allow the dominant cryptocurrency to bottom out at its low price range and prepare for a new mid-term rally over the next couple of months.
Key Technical Indicators Show That BTC Could Surge Up To $5,500: Analysis
“According to Bulkowski’s study, more than 60% of ascending triangles with declining volume end up breaking upwards with an average price rise of 35%. That gives us a target of $5500 BTC once the breakout is confirmed.”Other traders are optimistic about the price of Bitcoin but are a little concerned about it being incapable of breaking out the $4,000 price range and are worried about whether it would test other major resistance levels. Over the past week, BTC managed to stay relatively stable in the $4,000 range but it was unable to rebound to the $4,200 level. Alex Kruger, a well-known crypto market analyst said that Bitcoin is going through a short-term correction by saying:
“It is a simple stops run. Prices had just gone up vertically for 16 days without a pullback. Take $ETH for example: +38% without a pullback. Lots of levered longs piled up. And people FOMOed in. BTC reached the first level strong resistance ($4200) and a correction ensued. As it is with any other asset class or market, the analyst emphasized that a prolonged bullish movement is often met with a large pullback.”On the technical side, Bitcoin is having a hard time finding a decent momentum and it could require a slight push that will boost the price to escape from the $4,200 level in the near-term. While Bitcoin recorded slight losses on the day, many crypto assets like TRON, OmiseGo, and Cardano showed slight gains up to 10 percent with Cardano leading against Bitcoin. It is also important to notice the hashrate of BTC because the gap between it and the price explains that the miners are willing to mine for almost no profit because they expect for the price to increase in the long run.
Bitcoin Is At $4,001 – Finally Breaking Through The ‘Crucial Mark’ Again
“If $BTC starts getting higher timeframe 4hr/1D closes below 3930, THEN I’ll consider being bearish short term. Unless you are a short term day trader flipping your outlook between 4400 and 2k after a red 30 minute candle isn’t too helpful,” an analyst named Luke Martin tweeted.Historically, the crypto market has been prone to making big swings during weekend trading sessions - meaning that traders may gain more insight into where BTC could be heading over the next couple of days. Another popular crypto trader and analyst named The Cryptomist on Twitter, spoke about the possibility of Bitcoin dropping in the $3,000 region. As she stated:
“$BTC Mentioned couple days ago we will see movement for yesterday price action. We dropped and bounced of candle support as RSI support failed. We have 2-3 days to break this 4010 region resistance before we break this candle support and test target #1 at 3900 range.”If the crypto drops below $4,000 it will likely be a strong psychological level of resistance which may prove to be difficult to break above.
Calm Before The Storm: Bitcoin Dominance Reaches Low Levels Similar To 2018
Bitwise To SEC: 95% Of Volume On Unregulated Exchanges Is Suspect
“Under the hood the exchanges that report the highest volumes are unrecognizable. The vast majority of this reported volume is fake and/or non-economic wash trading.”Bitwise sources its data from the widely known statistics tracker CoinMarketCap (CMC) which claims to include a large amount of this suspect data, “thereby giving a fundamentally mistaken impression” on the true size of the Bitcoin marketplace. The claims also cite that 95% of the reported volume is fake and that the real market for BTC is “significantly smaller, more orderly, and more regulated than commonly understood” - which roughly amounts to $273 million. After analyzing the regulated exchanges - using Coinbase Pro as a case study - Bitwise reveals the nature of the trading patterns that is trustworthy. The key characteristics include an “unequal and streaky” mix of red and green (sell and buy orders) whose distribution fluctuates considerably at any given time. The report also cites that the trading patterns on Coinbase Pro reveal “a greater-than-random number of round trade sizes,” which it characterizes as “more natural,” typically human behavior. Bitwise noted:
“It’s [the spread is] $0.01. At the time this screenshot was taken, bitcoin was trading at $3,419. That means bitcoin was trading at a 0.0003% spread, making it amongst the tightest quoted spread of any financial instrument in the world.”In the conclusion of Bitwise's report you can see that the overall findings “demonstrate that this ETF application [for its Bitwise Bitcoin ETF Trust] meets both” of the conditions requested by the SEC on how a Bitcoin ETF could satisfy the requirements of the Exchange Act.
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