Notes From the Brink: Reasons Behind the Crypto Bear Market

Publié le by Cointele | Publié le

After a week in which double-digit losses wreaked havoc on many high-profile cryptos, and Bitcoin momentarily fell through the $6,000 support, pitiless bearish sentiment has been circling, with some accusing the top coin of being "Exhibit A" in a "Permanently impaired or even game‐over" market.

"The long term trend is way up, but I expect many short-term swings in the market along the way. Fundamentally, the world needs Bitcoin, and that demand will only increase in the coming years as Bitcoin finds more and more uses and applications."

BTC dominance - or Bitcoin's percentage of total crypto market cap - continues to break 2018 highs.

CryptoCompare CEO Charles Hayter yesterday proposed that the week's market decline was a ricochet off the back of U.S. regulators' recent decision to shelve a high-profile application for Bitcoin exchange-traded-fund until September.

" momentum-based selling following the ETF kickback and the usual gyrations of a market in a depressed mode.

First, in mid-July, a market rally kicked off, bolstered by news that the $6.3 trillion asset management heavyweight BlackRock - the world's largest provider of ETFs - was beginning to assess potential involvement in Bitcoin.

Just two weeks later, the markets turned, taking a sharp tumble in response to news that the high-profile Winklevoss twins' Bitcoin ETF appeal had been denied, with a dizzying $12 billion wiped from total market capitalization.

"These startups [raised] a lot of funds but they don't have treasury management or enough cash management experience, so they're selling too early and causing a lot of pressure in the market. It was fine last year but right now the the market is so fragile that it causes a lot of pressure."

The turning tide in summer 2017 sparked talk of a so-called "Flippening," with some claiming that Vitalik Buterin's brainchild would soon take the lion's share of overall crypto market capitalization.

With Ethereum's dominance now dipping as low as 13.5 percent August 14, Timothy Tam took the measure of fortunes as now doubly reversed, emphasizing that "The big story in the market [this week] is the huge weakness in Ethereum," and noting that "Bitcoin has held up relatively well versus Ethereum," even as it saw a dent in its chart against the dollar.

x