Bitcoin Dips Below $4,200 as Crypto Markets Run Into Familiar Resistance
Bitcoin and the broader cryptocurrency market ran into familiar resistance on Sunday, as the bulls failed to inspire new highs during the much lighter weekend trading cycle. Cryptoassets are coming off one of their worst months in history, opening the door to bargain hunters and long-term supports to boost their holdings.
The cryptocurrency market cap, inclusive of bitcoin and the broader altcoin/token universe, fell nearly $3 billion to $135 billion on Sunday. The asset class as a whole reached a high of $139.2 billion earlier this weekend, which was slightly below last Thursday’s swing high of around $142 billion.
The high of last Thursday invited a wave of selling pressure back into the market, triggering sharp declines across most major assets. The cryptocurrency market reached a low of $128 billion on Friday before the weekend rally ensued.
In terms of individual currencies, bitcoin fell 1.9% to $4,159. The leading digital currency accounts for 53.6% of the entire market.
XRP slipped 1.2% to $0.3692. XRP has quietly defended the $0.3600 handle since it became the second-largest cryptocurrency. The so-called “flippening” occurred after Ethereum experienced a bigger drop-off last month.
Ether’s price was down 1.4% on Sunday to $117.13.
Another “flippening” event occurred last week in the nos. 4 and 5 spots. Stellar XLM has leapfrogged bitcoin cash in terms of market cap, though both continue to trade neck-and-neck. XLM was up 0.5% at $0.1617 on Sunday. BCH, meanwhile, was little changed at $172.49.
Bitcoin SV, the cryptocurrency borne out of the bitcoin cash hard fork, continues to trade inversely with the broader market. At the time of writing, the BSV price was up 6.4% at $101.19.
Search for Direction Continues
November was a period of considerable pain for cryptocurrency traders. The market lost nearly $100 billion from peak-to-trough in a series of panic sales and outright capitulations that tested the resolve of the most ardent crypto supporters. In the process, bitcoin registered its worst monthly drop in seven years. This ended a period of relative stability for the leading digital currency, as evidenced by the sharp drop in volatility since the summer.
Although much of the selloff was tied to the events leading up to and following the bitcoin cash hard fork, the limited rebound in prices suggests investor sentiment has been severely damaged. From a price perspective, market participants have largely discounted the multitude of positive developments on the adoption and institutional fronts.
This was recently highlighted at the annual Consensus Invest conference in New York, which reminded investors that the underlying innovation in blockchain and cryptocurrency was still there despite the loss of mania tied to ICOs and prices. Even SEC Chairman Jay Clayton was present at the event, and despite conveying a somber outlook on bitcoin ETFs, he gave no indication that crypto was going away anytime soon.
December will be an interesting month for crypto. It remains to be seen whether the recent plunge represents a true bottom in prices or whether another onslaught on bitcoin’s $3,000 support will continue. In either case, investors can expect a more optimistic outlook at the beginning of 2019 as two major players – Intercontinental Exchange and Nasdaq – enter the bitcoin futures market. Despite the recent upsurge in short-selling, the futures markets have had a stabilizing effect on bitcoin prices.
Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
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