Market Correction Knocks $20 Billion Off Cryptocurrency Values; Bitcoin Search Trends Skyrocket
Bitcoin and the broader cryptocurrency market underwent a sharp correction on Sunday, knocking more than $20 billion off coin values in less than 24 hours. The pullback follows a brief period of consolidation that saw bitcoin struggle to return above the $12,000 mark.
Crypto Market Update
All of the top-20 coins reported losses Sunday, with bitcoin falling 6.9% to $11,155, according to CoinMarketCap. With the reversal, bitcoin’s market cap has slipped back below $200 billion for the first time since Thursday.
After peaking north of $350 last week, Ethereum’s price swung back below $300 on Sunday. In the last 24 hours, ether has fallen 3.5% to $295.50.
XRP also extended to the downside and has now given back more than 18% from last week’s high. At the time of writing, XRP was down 3.2% at $0.4033.
After surging more than 13% on Saturday, Litecoin’s price consolidated in a narrow range early Sunday. The fourth-largest cryptocurrency by market cap was down 0.2% at $127.57.
Bitcoin cash and EOS were each down more than 5% through the early part of the day. Binance Coin also fell 3.1%. Tron, Cardano and Stellar – ranked 10-12 by market cap – were each down by at least 2.1%.
The total value of all cryptocurrencies in circulation plunged to $321.5 billion on Sunday. Coin values were as high as $347 billion during the previous session.
Sunday wasn’t the first major correction to sweep the cryptocurrency market. Just four days ago, the digital asset class shed roughly $56 billion as bitcoin and altcoins plunged in unison. At the time, BTC was extremely overbought. Exchange-based volatility was also a factor after Coinbase, Robinhood and others reported temporary outages. Read $386 Billion to $330 Billion: Sudden Crypto Correction Comes with Heavy Dose of Scrutiny Toward Libra.
Bitcoin Search Trends Rising
Unlike the 2017 bull market, the monthslong crypto rally has occurred without one key demographic: retail traders. Rather, it has been long-term holders and smart-money accumulation that have driven bitcoin to 17-month highs. And unlike the previous bull market, bitcoin’s dominance has been growing, not falling.
If Google search trends are any indication of retail interest, things may be about to change.
Global searches for the term “bitcoin” spiked last week, reaching the highest level since the bull market. Google search trends reveal that “bitcoin” likely achieved a perfect score of 100 in the week ended June 30. As far as search trends go, a 100 score reflects maximum interest in a particular subject.
It’s not entirely clear whether this number is final or just preliminary, as the dotted line suggests it may be subject to change. Nevertheless, searches for bitcoin have been on the rise since February, which is right around the time that the price began to pump.
An influx of retail traders like we saw in 2017 could spark the next leg of the crypto rally. Whether it’s through hastening crypto adoption or fueling a FOMO-inspired rally, the return of retail interest is largely viewed as extremely bullish for bitcoin and other digital assets. However, this bullish bias comes with a higher dose of volatility, which could make it more difficult to gauge the “intrinsic” value of assets.
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. Charts via CoinMarketCap.