On Tuesday, July 10, Bitcoin along with the cryptocurrency market witnessed a major pullback on the charts with the entire market losing $24 billion in one single day. During the last one week, Bitcoin was seen on a good upward momentum especially after it hit the 2018 low of $5800 on June 29, 2018. On Sunday, July 8, Bitcoin crossed $6800 point and everyone was optimistically eyeing it to break the $7000 resistance.
However, the hopes were short-lived as Bitcoin slipped by more than 10 percent on Tuesday, with a major pullback below its crucial support of $6400. At the press time, Bitcoin is trading at $6384, according to the data on CoinMarketCap. In addition to Bitcoin, several other cryptocurrencies were seen correcting heavily.
Bitcoin’s immediate competitor and the second largest cryptocurrency by market cap – Ethereum – also witnessed a heavy correction of 10%. Ethereum, which was trading above $480 in the early hours on Tuesday, went below $440 levels later in the day. Currently, Ethereum is trading at $435 according to CoinMarketCap.
While looking to the charts of the overall crypto market valuations, the data available on CoinMarketCap shows that the market lost more than $24 billion on Tuesday. During the early hours on Tuesday, overall market valuations stood at $274 billion that went to hit a low of $250 billion later in the day.
The trading volumes across the cryptocurrency market have dried up in the past few days signing that there is not enough investor confidence able to drive the markets ahead convincingly. Experts in the industry believe that Bitcoin is poised to bottom out in the range of $3000 to $5000 before starting for its jouney to $20000 and above. BitMEX CEO Arthur Hayes says:
“Absolutely [I stand by $50,000 prediction by 2018]. I think something [bitcoin] that goes up to $20,000 in one year can have a correction down to $6,000. I think we can find a bottom in the $3,000 to $5,000 range, but we are one positive regulatory decision away, maybe an ETF approved by the SEC, to climbing through $20,000 and even to $50,000 by the end of 2018.”
Clem Chambers, the CEO at financial data provider ADVFN, believes that Bitcoin can go to as low as $2000 before starting its journey back to $20000. Chambers believes that fiat currencies are insufficient for the global financial system. He says:
“It will probably hit $2,000 before it hits $20,000. They [fiat currencies] are not creating enough money to make the world go around. The cryptocurrencies are filling that vacuum. Because that’s an economic suction going on there and the cryptocurrencies are filling that vacuum. It will generate an economic lift (for Bitcoin).”
Factors That Can Pull Bitcoin Above $7000
The latest report from GlobalCoin lists some factors that can create a positive drive for Bitcoin price rise above $7000.
- Crypto exchanges like Coinbase launching institutional products like Coinbase Custody to attract institutional players to the crypto market. This will ensure a huge capital inflow to the crypto market.
- The U.S Securities and Exchange Commission (SEC) working on clear guidelines and framework for the functioning of digital currencies. This will instill more confidence in the institutional players as it brings clarity on how the crypto market is going to proceed further. In addition to the U.S, other big crypto markets like Japan, South Korea and Australia are also working on similar directives.
- The recent filing of the Bitcoin ETF by the financial giant like the Chicago Board Options Exchange (CBOE) is an indicator that institutional players are looking forward to parking their money in the crypto space.
This being said, it would be interesting to see how the crypto market dynamics will shift from here onwards.