After several months of low volatility with the Bitcoin price bobbing about the $6500 mark, usually between prices of $6200 and 6700$ as observed by margin traders and crypto observers, the price finally dipped more than 10% on Wednesday. As predictions and technical analysis tend towards a further Bitcoin price dip, a major Bitcoin investor, Travis Kling, chief investment officer at Ikigai crypto-assets management firm believes that the dip is good for cryptocurrencies as a whole.
Will the Dip Lead to Crypto Investors Trusting Bitcoin the More?
The CIO stated in a tweet that the dip that BTC is experiencing should induce more capitulation in down market cap names. As a result of this, traders could stop speculating on them soon, and grow their trust of the dominant cryptocurrency. He tweeted;
“BTC holding in was giving folks hope to hold on to their shitcoin bags for a broad-based pump that won’t come. Let them go.”
The Bitcoin dip was mirrored in the whole cryptocurrency market as each of the top coins and tokens in the market dropped in market capitalization. The major coins, namely Ethereum (which launched 2015 and is set to experience a positive change with advancement in its transactions per second rate), Ripple (which has been having progress with adoption by the banks as a major cryptocurrency), EOS, and Bitcoin Cash (which had a hard fork activated days ago in its blockchain) have all fallen in market value contributing a total loss of about $26 billion in market capitalization in the cryptocurrency market. Lesser known coins have also experienced drops in their market caps as well as stated in the tweet by the CIO above.
The Chief strategy officer at a crypto investment firm, CoinShares, stated that ‘these assets’ didn’t experience a lot of trading in their respective markets. In an interview with CNBC, the Chief strategy officer, Meltem Demirors mentioned that most of the coins that are not Bitcoin were in some kind of ‘liquidity crisis.’ She said that;
“What we see across the board is asset prices are down 75 percent or more, in some cases 95 percent. They’re going to need to start firing employees. They’re going to need to cut costs. You’re going to see consolidation, and some of these assets, inevitably, will get marked to zero.”
The Seeming Trend of the Crypto Market
The latest dip in the crypto world seemingly appeared orchestrated as if the decision to sell was made by a group of people all at the same time. Analysts monitoring the crypto space think it is a result of the recent Bitcoin Cash hard fork. Brian Kelly, chief executive at BKCM, an investment management firm, said that the hard fork of Bitcoin Cash scared investors who predicted there would be chaos in Bitcoin Cash markets. He further stated that the sales caused panic and led everyone to start selling their crypto assets. If his assertion is true, then there’s a good chance that the crypto market will experience a reduction in price and demand.
Bitcoin and other top altcoins are now at a new low for the year. and this could prompt both institutional and retail investors to enter the space at the bottom. Also, there is a sentiment in the market that Bitcoin can form a double bottom at $4,500. That is particularly why upside corrections are looking weaker and signaling an extended downtrend.
Top cryptocurrency exchanges, however, have reaffirmed that they would support the Bitcoin Cash hard fork to bring back trust in the market. Holders of the Bitcoin Cash (BCH) coin will receive the exact amount they’re holding in the new coin as a result of the activation of the hard fork. It is speculated that for Bitcoin Cash holders, it’s not wise to sell right now.