Bear Market Is Not Done With Crypto But Can We Expect A Short Term Reprieve
At the time of writing, Bitcoin has been trading at $3,635 with 24-hours gains of 0.13 percent. The leading cryptocurrency with a market cap of $63 billion has been managing the daily trading volume of over $6 billion.
Among the top cryptocurrencies, half of them are in green viz. Ethereum (ETH), XRP, and Bitcoin Cash (BCH) by less than 1 percent with Litecoin (LTC) leading the pack with over 3 percent gains. Cardano (ADA), IOTA (MIOTA), and NEO are also in the green.
Today’s top gainers are aelf, Holo, and Aternity while the biggest losers are Quant, Aurora, and Repo.
In the past month, the total market cap has changed by a small percentage as in mid-January it has been at $122 billion and at press time, it has been at $121 billion. Having said that, it did drop down and remained at $111 level during the last week of January and the first week of February.
Short-Term Dread Or Bounce
Recently, while talking to Bloomberg, Tom Shaughnessy, principal of crypto research firm Delphi Digital said that bear market is not done for crypto, and this year there is still more downside to see.
Earlier this week, Barry Silbert the CEO and founder of Digital Currency Group and Grayscale Investments said that most of the cryptos will go to zero.
“I’m not a believer in the vast majority of digital tokens and I believe most will go to zero.” He added that “Almost every [initial coin offering] ICO was just an attempt to raise money but there was no use for the underlying token.”
As for what could bring the bulls in, Shaughnessy shared that adoption, upcoming halvening, and bitcoin ETF are potential catalysts to the Bitcoin price.
Some analyst are expecting more downside for Bitcoin as crypto trader Hsaka, shared,
“Haven't the slightest as to which way this expands. A right proper stalemate as of now, wicks on both sides without any follow through of either. If I was hard-pressed, I'd say I'm leaning towards more downside.”
A similar downtrend is expected in Ethereum as an analyst with Twitter handle Altcoin Psycho says,
“Pretty bearish looking chart here….Local high starting to round out while rejecting long term resistance trend line. For those that were around for the bull run, you know ETH loves its diagonal trend lines.”
However, there are some analysts that are expecting an upward movement for Bitcoin as the market analyst, Benjamin Blunts emphasizes on the current top out of USD index.
Previously he had shared that “I believe something like this is going to happen on the $DXY,” and “As a crypto trader it is important to track the $USD as often times they are inversely correlated and move opposites.”
Meanwhile, Zhu Fa, co-founder of China-based crypto mining pool, Poolin predicted Bitcoin price to hit 5 million Chinese yuan ($738,000 (USD). Zhu shared that “it now feels more like a bear market,” but he predicted the next bull cycle will see Bitcoin price rising 10 to 20 times higher than the previous one. However, he also noted that the massive price spike like last time’s $20k will not always exist and that the next one could be the last bull run.