Will the Autumn Be Hot for the Crypto currencies: Looking for Bears, May be?
The traditionally holiday August month was not at all quiet in the crypto currency market. But the crypto market performed relatively well over the past month. The positive price action came after Bitcoin was able to prevent a potential drop below $ 9,000, finding support above $ 9,300. The entire market capitalization of crypto currencies responded positively, posting an impressive correction from values below $ 250 billion to highs above $ 278 billion.
And with the beginning of September, we also saw another crazy week during which Bitcoin jumped 6.63%. Once again, we had comments from central bankers and exchanges. Bitcoin is currently taking the lion’s share of the market capitalization. Its market dominance is steadily increasing, reaching levels above 70%. The main digital coin is now struggling with very strong resistance and, at the same time, a psychological level at $ 10,000. Since the end of the bear market in August, Bitcoin has made a pretty big recovery in a relatively short period of time. So, it is not surprising that we are now seeing a process of consolidation.
At the same time, the altcoins attract a more ambiguous reaction. In this sector there are many more so-called “sad bears.” This weekend showed a very unexpected jump in Altcoins prices: at one point they were apparently rising as Bitcoin was falling. That is why today I would like to draw your attention to them and what we should keep in mind as autumn approaches.
What problems do Altcoins face?
Altcoins have always been more volatile. In a short period of time, newly created assets generate huge profits, with increases of 1,000 or even 10,000 times occurring within weeks or even days.
But in 2019, the altcoins seemed to have lost their luster – and in most cases they could even be considered as no-go assets. The first reason is that volumes continue to decline and with a few exceptions, the Altcoins market is in decline. Altcoin price has returned to levels from before the big rally in 2017, while Bitcoin market cap dominance is now over 70%. This once again establishes a more traditional relationship between BTC and Altcoins.
For most Altcoins, the combination of delisting and reduced interest resulted in almost insignificant trading volumes. Only a handful of coins receive inflows from Tether markets and these coins manage to retain some of the 2019 profits.
There is no way also to ignore the strict regulations. For years, the crypto currency market has been free to all. This allowed the creation of coins and tokens with extremely creative economic models. But regulators started to take notice and monitor assets that can be considered unregistered securities. Stock exchanges quickly noticed the worsening climate and began to pruning their choice of altcoins. The loss of interest from Korean investors also hurt some of the coins, which had previously enjoyed fairly active trading at a premium.
And let’s not forget that all eyes are on the price of BTC, which is still at a crossroads and yet to go through a dramatic rally. If that happens, some Altcoins may also spark optimism and be appreciate on the back of BTC. But since the leading coin is still struggling with the $ 10,000 level, there is enough uncertainty that makes buyers more reluctant to touch the Altcoins.
Another factor I would like to highlight is the change in the profile of crypto traders. In the past, there were periods of hyper activity that attracted new enthusiasts to the crypto space. But as search engine statistics show, the wider public is no longer so interested. Now the crypto space is made mostly of insiders and they are more skeptical of big promises.
In conclusion, I can only say that, despite all the aforementioned factors, many new projects are emerging on the crypto currency market every day. That’s why I think the autumn for cryptos will be quite “hot” and the picture can change quickly. So, follow our next technical analysis to keep update with the latest developments in the crypto currency market.
Author: Silviya Velcheva
* The views expressed in this material do not constitute a recommendation or advice for the purchase or sale of cryptocurrencies in the digital assets market or other financial instruments. The predicted forecasts meet the expectations of the author of the material and may not materialize. Trading in currencies, contracts for differences on margin or cryptocurrencies poses a high risk and may not be suitable for all investors. Past results are not a guarantee of future success.