Last week, the crypto market lost more than $12 billion of its valuation due to large losses experienced by the major cryptocurrencies. Continuing on its roller coaster ride, Bitcoin has recovered somewhat, although the upward momentum of the major tokens is still weak.
The value of the global crypto assets market was hovering around $257 billion on August 7. This number was supported by the relative stability of Bitcoin (at $7,300) and Ether ($400).
But within the week, the prices plummeted with Bitcoin falling to $6,300 and Ether falling to $320, which were slight recoveries over the low points of $5,980 and $305 respectively on August 11. In just five days, over $43 billion vanished from the market.
Major cryptocurrencies have experienced a strong downward trend over the past month. Only Bitcoin has retained a significant portion of its value, unlike almost every other major token. Ether, possibly due to the sell-off of ETH by ICOs and blockchain projects, has been one of the worst-performing tokens so far in August, a reversal of its momentum from January to July.
Large-scale blockchain projects dumped Ether on public cryptocurrency exchanges, which may explain why one of 2018’s most promising cryptocurrencies lost more of its market valuation than any other major cryptocurrency over the past week.
If the market is to experience an increase significant value – 40-50%, rather than the measly 1-5% that has been the general trend, Bitcoin needs to secure momentum at its most challenging resistance levels. Short-term, it is unlikely than even the major cryptocurrencies can rally enough to make this happen. However, if the major tokens bottom out, then slowly build stability over the course of a few weeks, there may come a strong rally; but the probability of a sudden 10-20% increase (as Bitcoin experienced in late June) is low.
Cryptocurrency analyst Willy Woo, who predicted a big price drop of Bitcoin from $9,000 to $6,000 in late May, said:
“… you can see BTC is much stronger this time around. (Comparing OBV indicators over the same time frame is a great way to see of this more clearly.) There’s a lot of buying going on behind the fear and capitulation.”
BTC and other major cryptocurrencies need to build stability and momentum, to support the next mid-term rally.