Bitcoin Price Risks Further Pullback as Bearish Trend Strengthens; Cash App Leaves Room for Optimism
Bitcoin’s price was getting very little reprieve from the sellers on Tuesday, as the market looked poise to test a new yearly low. This comes despite flashing oversold levels on the relative strength index (RSI).
The bitcoin price swung as low as $3,326 on Coinbase Pro, where it was approaching the lowest levels in 15 months. It last traded at $3,350, having declined 4% from the previous day. The leading digital currency registered similar levels on Bitstamp and Bittrex. However, it traded at a $100 premium on Bitfinex.
Looking to the aggregate data courtesy of CoinMarketCap, we observe an average value of $3,414.93. That represents a drop of 4.2% over the 24-hour period. That gives bitcoin a total market cap of $59.5 billion, which accounts for 55% of the entire cryptocurrency market.
Trading volumes have dropped over 10% in the last 48 hours, though options markets continued to dominate. On Tuesday, BitMEX processed 23% of bitcoin’s trade volume on virtual currency exchanges.
Bitcoin CME Futures (BTZ) for December settlement had 1,105 active contracts at the time of writing. Bitcoin CBOE Futures (BGZ) had 1,041 contracts. The futures contracts last traded at $3,330 and $3,335 respectively.
As Hacked previously noted, the bitcoin price is likely to test new yearly lows over the short term as the sellers target the $2,800-$3,200 support zone. A test of that critical region is likely before the end of the month. Until now, there’s no evidence that bargain hunters are playing the rebound, which means investors are still on hold until a definitive bottom has been reached.
Cash App Surges
Square’s highly popular Cash App, which lets users buy bitcoin, has become the no. 1 finance app on the Google Play Store. In doing so, it also surpassed Coinbase as the largest bitcoin buying app in the United States. Astonishingly, Cash App has also surpassed YouTube on Apple iOS to become the no. 1 free mobile application on the platform.
The explosion of Cash App suggests that demand for bitcoin, especially among millennials, isn’t as low as previously thought amid the downtrend. More importantly, it signals the rise of digital payments in the world’s largest economy. This latter trend could have important implications for cryptocurrency payments as merchant adoption grows.
Square CEO Jack Dorsey believes bitcoin could one day become the currency of the internet. As such, Square is looking to integrate cryptocurrencies as a way of overcoming inefficiencies in the current payments system.
Intercontinental Exchange announced earlier this year that it is teaming up with some of America’s largest businesses to boost merchant adoption of bitcoin and other digital currencies. The Bakkt initiative, which launches its physical bitcoin futures market in January, will eventually support crypto payments at the retail level. Although it’s not entirely clear when, or how, this will be accomplished, partners like Starbucks and Microsoft could make the promotion of bitcoin payments much easier.
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.
Featured image courtesy of Shutterstock.