Although the ups and downs of a naturally-volatile landscape can be interpreted in a dozen different ways, it’s hard to ignore this current fall in value which has seen the crypto market lose a whopping $25 billion over the last three weeks. Couple that with a lack of trading volume and it’s easy to understand why some analysts and investors are starting to get the jitters. One thing few can agree upon is the question of what exactly is driving this sudden bout of what looks a case of market apathy.
A recent spell of negative news may have played its part – this summer has been littered with stories of hacks and scandals that have rocked public confidence.
There’s also the sensation of ‘non event’ – a hangover from wild claims in many quarters during the early months of last year that evangelised about 2019 shaping up to be “the year of crypto”. Alas, other than a fairly feeble foray towards the $14,000 mark earlier this year, BTC has largely failed to deliver on the promises of many of its hardcore preachers.
Perhaps the turning point in what looks to be an ebbing tide of enthusiasm for crypto came from the mouth – or, rather, twitter account – of Donald Trump.
When he declared cryptocurrency worthless and based on nothing but thin air as he attempted to make a stirring speech about the global strength of the US dollar, he genuinely slashed the tyres of the bitcoin bus.
It was an unexpected bump in the road, and one which analyst Dalbir Kumari expects will hang over cryptocurrency for years to come.
“Crypto enthusiasts on the whole tend to be the sort of people who like to see big business and big institutions being disrupted,” he explains.
“You look at the rhetoric from Donald Trump about cryptocurrency and you just instantly think it would send the markets flying – on paper it is exactly the kind of thing they want to hear.
“If they’re getting under the president’s skin, then they know bitcoin and the big altcoins are doing what they want them to do.”
However, as is often the case in crypto markets, the opposite of what is expected tends to happen.
Digital assets right now are simply not getting near higher price ranges. Nor are they close to the levels of optimism experienced little over three weeks ago when the market cap across the board was around $282 billion. In fact, they’ve fallen by an alarming seven per cent.
“I’m looking right now at the value of the world’s cryptocurrencies and it stands at $261 billion which instantly says to me there’s an apathy issue here,” adds the experienced Mr Kumari, a New York-based trader and analyst.
“Everything now hinges on how bitcoin performs around this critical $10,000 line and whether or not it can keep above it for long enough to allow the trading volume to return and hold it up, ready to get back on track.
“If it doesn’t, I can see the unpopular theory that bitcoin is destined for a fall back below $9,000 or even lower playing out over the coming weeks.”