Bitcoin Price Under Pressure as Market Slips Below $6,600
Bitcoin’s tepid recovery has apparently stalled on Wednesday, as the bulls once again failed to push prices above a key technical threshold. The intermediate outlook remains unchanged, though weak trading volumes could undermine BTC’s recent bout of stability.
The price of bitcoin reached a low of $6,513.50 on Bitfinex, having declined more than $200 from its weekly high of around $6,730. At press time, BTC was down 1.1% at $6,591. The digital currency exhibited more volatility than in recent sessions, though daily prices fluctuated within a $150 range. Bitcoin’s daily volatility has been in sharp decline since the beginning of the year.
Low trade volumes are exerting downward pressure on the market. Digital currency exchanges have processed only $3.8 billion worth of bitcoin trades in the last 24 hours. Volumes were down to roughly $3.3 billion over the weekend.
At current prices, bitcoin has a total market capitalization of $113.7 billion, comprising 52.3% of the entire crypto market. Trade volumes across all currencies amounted to $11.6 billion on Wednesday, according to CoinMarketCap.
While most crypto analysts believe bitcoin will one day emerge from its bear market, others aren’t so keen on the virtual currency. An analyst at Juniper Research recently said that 2018 should have been an ideal year for bitcoin to leave its mark. Brexit woes, trade war risks and surging bond yields should have made bitcoin a more attractive substitute for investors looking to diversify away from economic and geopolitical risks. Instead, the complete opposite has occurred and prices are down roughly two-thirds from their peak.
“If Bitcoin cannot make gains in such favourable circumstances, then it is unlikely to prosper as and when these issues are resolved,” Juniper researcher Windsor Holden said in a new study published this week, as quoted by CNBC. “We feel that the industry is on the brink of an implosion.”
Holden’s analysis seems to ignore the many roadblocks preventing traditional investors from accessing the bitcoin market. Institutions have cited regulatory uncertainty and a lack of securitization options for their decision to remain on the sidelines for now. In the meantime, efforts to bring bitcoin to mainstream investors continues to grow with several firms launching custody services and others trying to bundle bitcoin in an exchange-traded fund (ETF).
What’s more, appetite for traditional “risk-on” assets have been notably strong for long stretches of the year, especially in the capital rich U.S. stock market. It was only a few weeks ago that U.S. stocks traded at record highs. Pro-growth optimism tied to President Trump’s policies and strong corporate earnings suggest that a return to record levels isn’t out of the question.
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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