Once more unto the breach, dear friends, once more… Bitcoin tried valiantly for a second time in 30 days to breach the $13,000 “wall”, but, unfortunately, was pushed back down below $12,000. Resistance has thickened on these ramparts on the way to a new All-Time-High, but the market leader has definitely been persistent. Volatile swings of roughly 10%, however, are becoming more commonplace these days, but the much anticipated 30%+ correction has not made its appearance, as of yet.
System volumes were also up during the selling period, suggesting that a round of profit taking was the general cause for the bloodshed. Bitcoin was not the only one to suffer casualties. Ether (ETH), Ripple (XRP), Litecoin (LTC), and EOS (EOS) were also taking sizable hits of from 6 to 15%, while the entire industry gave up over $27 billion of market capitalization, the largest loss thus far for the month of July.
Altcoin optimists, who have been taking a beating of late, are trying to put a positive spin on recent pricing action taking place below the market leaders. Smaller programs have also been depreciating, but more so, during the current sell off. Hodlers of these more risky tokens have been hoping for a broad-based recovery in their sector, based on previous patterns observed, but the highly anticipated “alt-season” and rally have been nowhere to be found.
Several analysts have reacted negatively when questioned about the future prospects of minor altcoins. The general narrative has been that there are far too many programs with poor fundamentals and questionable “use cases”. The lack of a rally suggests that investors are becoming more discriminating and refusing to reward what appears to be lack luster performance. Max Keiser, an American broadcaster and Bitcoin cheerleader, is but one voice that has said: “The short answer is, in my view, the altcoin phenomenon is finished.”
But optimism does spring eternal in Crypto-Land. Don Alt, a popular cryptocurrency analyst on Twitter, calmly stated the opposing view in a recent tweet: “Alt ratios have been going up when BTC went down and vice versa. On this most recent BTC price drop, a lot of alt pairs went down along with it. Decoupling is a good thing for alts and in my experience often leads to their tops / bottoms. Short term pain – mid term gain IMO.” Alex Krüger, an economist who focuses primarily on cryptocurrencies, also noted: “Today’s crash *could* be the end of the downtrend for alts vs BTC.”
Since the entire crypto market went into a modified tailspin, many other analysts suspected that a news event of some type had been the culprit, rather than a simple round of profit taking. Although no one claimed to be following Jerome Powell’s semi-annual testimony before Congress, he was questioned about Facebook’s Project Libra. His comments were not at all supportive.
When questioned about Libra, Powell responded: “Libra raises serious concerns regarding privacy, money laundering, consumer protection, and financial stability. These are concerns that should be thoroughly and publicly addressed.” Powell further called for a halt to the project until all regulatory questions have been addressed, as well.
One analyst that bought into Powell’s comments having a serious impact on crypto price behavior was Craig Erlam, senior market analyst at the FX trading platform OANDA. He believed that:
This is a direct response to the Powell testimony and comments on Facebook’s Libra and the implications that could have for the entire cryptocurrency space.
Mati Greenspan, senior market analyst at eToro, was one who felt that the market was not paying much attention to Mr. Powell’s comments, and added:
It seems the market wasn’t ready to break a fresh high just yet, and (Bitcoin) is now back near the low end of its most recent range (of $10,000 to $14,000). This sort of volatility is quite normal for Bitcoin.
Omkar Godbole over at Coindesk was wiling to accept that Powell’s outburst may have affected the market, but he personally felt that “the bulls were already looking tired”. He remained positive going forward:
Bitcoin suffered a significant drop in the last 24 hours, but the higher-lows pattern on the daily chart is still intact and the outlook remains bullish.