Cryptocurrency Market Stabilizes Near $270 Billion with Low Volumes Favoring the Bears

The cryptocurrency market failed to make headway on Saturday, with prices stuck in a narrow range amid a renewed slump in trade volumes.

Markets Drift Sideways

Crypto prices hovered within a narrow range for most of Saturday, with the total market oscillating between $265 billion and $275 billion. At the time of writing, the total market value of all cryptocurrencies was just under $277 billion, according to CoinMarketCap.

Trading volumes plunged more than 26% for the day, a sign that the recent uptrend was losing momentum. Total market turnover amounted to just $12 billion Saturday, down from $16.4 billion on Friday.

Lower trading volumes are generally associated with downtrends in the market, as fewer traders stake new positions on the major exchanges. Although this is not always the case, virtually every downtrend this year has been associated with a decline in trading activity.

In terms of individual currencies, bitcoin was virtually unchanged at $6,615. Ethereum was in the same boat, holding steady just below $472. Bitcoin cash, Ripple XRP and EOS fluctuated less than 1% in either direction compared with Friday.

The bulk of the declines were concentrated in cryptos ranked no. 6-8 by market capitalization. Litecoin, Stellar and Cardano each fell at least 1.5%.

Timing the Corrective Rally

As Hacked reported Friday, the cryptocurrency market is coming off its first positive week in a month as bitcoin and the major altcoins bounced off year-to-date lows.

In the case of bitcoin, a rally toward $7,000 – the cost of mining a single unit of the digital currency – appeared to be the next major hurdle for the bulls. However, the pace of the corrective rally is shown signs of fading, making an imminent uptrend less likely than it was earlier in the week.

For bitcoin to maintain its upward momentum – and influence the broader market in the same direction – it must maintain daily transaction volumes of at least $4 billion. The market turned over roughly $3.9 billion worth of BTC on Saturday.

While bitcoin bulls like Tom Lee and Arthur Hayes have maintained a lofty price target for the digital currency, signs of an imminent uptrend remain elusive. This comes at a disappointment for long-term holders of bitcoin, who saw prices make a decisive break higher earlier in the week.

As Hacked’s James Waggoner reported this week, psychology toward bitcoin remains negative, with technical patterns confirming this phenomenon over and overage again. Looking beyond the technical patterns, the overall market continues to see positive developments on multiple fronts, including regulation, business growth and the development of new custodial services for institutional investors. It remains to be seen whether these influences will generate positive momentum that could kick start the prolonged recovery that many are forecasting.

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.

Author:
Chief Editor to Hacked.com and Contributor to CCN.com, Sam Bourgi has spent the past nine years focused on economics, markets and cryptocurrencies. His work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Avid crypto watchers and those with a libertarian persuasion can follow him on twitter at @hsbourgi