Crypto Remains Relatively Steady, Market Posts Slight Loss
Finally, after days of mundane, sideways price action, the cryptocurrency market saw some long-awaited movement on Tuesday, despite the lack of clear fundamental, news, or technical catalysts. But it wasn’t the move that many optimists were waiting for, as Bitcoin (BTC) tumbled under the $6,500 price level after days of holding above the widely-regarded line of support.
Chart Courtesy of TradingView
Although the $6,500 support doesn’t hold as much significance as the $6,800 or $5,800 levels, for example, some technicians saw this move as a short to mid-term bearish signal, even though many industry leaders expect for prices to move upwards in the upcoming months. At the time of writing, BTC is worth $6,480 a piece and is down 1.8% in the past 24 hours.
Altcoins, however, haven’t fared as well, with a majority of the assets in the crypto top 10, save for Tether (of course) and Monero (XMR), posting losses of 3% or more. XRP and Stellar Lumens (XLM), widely regarded as ‘sister’ cryptocurrencies, unarguably had it the worst, falling by 8.5% and 6.5% respectively in the past day.
Chart Courtesy of CoinMarketCap
While the XLM decline left some investors worried, XRP’s 8.5% drop shocked many investors, as the firm behind the crypto asset, Ripple, recently announced a series of positive news at its San Francisco-based Swell event, which saw former U.S. president Clinton speak on the topic of blockchain technologies and the future of humanity. Notable speakers and event attendees aside, as brought attention to by some Ripple critics on Twitter, XRP has historically fallen during the Swell event, despite what one may initially assume.
Crypto Volatility Leaves Much To Be Desired, ETF Approval Could Change This
Make no mistake, despite the recent bout of slight, yet present selling pressure, which pushed crypto asset prices down in the past 24 hours, volatility in this nascent market has been reaching extremely low levels, in comparison to legacy capital markets that is.
As revealed by MarketWatch’s Aaron Hankin, the 30-day volatility index for the world’s leading cryptocurrency has somehow hit a 12-week low of 2.55%, which is the lowest that this index has been since July 10th. Moreover, this volatility-focused indicator is now more than 500 basis points lower than 8.02%, which was where the index was at when the ball dropped in New York’s Times Square.
So you may be asking — why has the cryptocurrency market come to a standstill?
Well, a group of analysts at Element Digital Asset Management has recently sought to bring clarity to the current crypto market situation, speaking with MarketWatch reporters in an email conversation.
Rebutting the claim that Bitcoin’s relative stability can be attributed to the adoption of the digital asset as a store of value, Thejas Naval and Kevin Lu, Element’s portfolio director and quantitative research director respectively, revealed that this theory is premature, alluding to the fact that BTC still hasn’t been widely received as digital gold. Addressing another theory, the analysts added that Bitcoin and other crypto assets aren’t finding stability due to increased levels of transparency, but that the market “has just simply run out of juice… becoming boring.”
Pointing out why this market has become a bore, the two explained that the denial of the long-awaited Bitcoin ETFs likely made investors wary, resulting in a slower market cycle and less intense price action. But, on the other side of the coin, if regulators were to approve such a vehicle, the Element traders added that this may signal mass adoption and would bring Bitcoin out of its slumber.
Closing off their discussion, the duo wrote:
Seems like everyone is waiting on the sidelines for someone else to make the first move in what could be an extremely long game of chicken.
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