The wounded cryptocurrency market is showing signs of recovery after a week-long maelstrom that saw over $40 billion wiped out from the total market cap amidst manipulation speculation, black market Bitcoin dumps, and fake news accusations.
Dogecoin Surprisingly Unscathed by Market Chaos
Negative market sentiment has seen virtually all altcoins bleed over the last week — apart from semi-serious cryptocurrency Dogecoin, which began life as a joke cryptocurrency. A surprising announcement from Yahoo Finance saw Dogecoin added to the Yahoo Finance iOS mobile app, resulting in a DOGE market cap surge of $100 million as one of the only tokens to escape recent bearish sentiment with positive price movement.
Bitcoin, currently ranked #1 by market cap, is down 1.11% over the past 24 hours. BTC has a market cap of $108.79B with a 24 hour volume of $3.58B.
Chart by CryptoCompare
Bitcoin Holds $6,000 Support Level
Bitcoin has demonstrated significant volatility over the last several months, ranging from $6,000 to the upper limits of $9,000. Throughout April, June, and August, Bitcoin values plummeted to $6,000, before returning to $7,300 on Sept. 4.
A major sell-off on Sept. 5, however, resulted in an immediate and dramatic drop in Bitcoin prices, with total cryptocurrency market cap losing $12 billion in a matter of hours. The sudden sell-off was linked to the movement of almost $1 billion in Bitcoin distributed from wallet addresses linked to now-defunct dark web black market platform Silk Road, as well as well as the purported cancellation of a potential Goldman Sachs crypto trading desk.
Goldman Sachs CFO Martin Chavez was quick to decry any correlation between the rapid Bitcoin price drop and the investment bank as “fake news,” but further negative price action on Sept. 9 saw the value of Bitcoin drop to $6,200.
Late Sept. 9, however, Bitcoin exhibited a sudden and unexpected rally, surging 4 percent from $6,190 to $6,450 in less than a minute. While Bitcoin has not yet moved beyond the $6,000 support level that has been tested multiple times over the last three months, a complete recovery from the sub $6,500 level could potentially catalyze a mid-term rally.
Ethereum, currently ranked #2 by market cap, is down 2.62% over the past 24 hours. ETH has a market cap of $19.93B with a 24 hour volume of $1.46B.
Chart by CryptoCompare
Ethereum Stabilizes Above $200
The last week of bearish market action has shaken investor confidence in Ethereum, which fell to a yearly low of $185 on Sept. 9. The Sept. 5 Bitcoin sell-off dragged Ethereum prices down from a stable point in the $280 range to below $260, at which point statements made by Ethereum co-founder Vitalik Buterin regarding the end of explosive growth within the cryptocurrency industry resulted in further price devaluation, placing ETH at $220 on Sept. 7.
Community speculation regarding a potential large-scale market dump driven by initial coin offerings liquidating significant amounts of Ethereum further demoralized skittish market participants, culminating in a 10-hour sell-off that drove ETH down to $185 on Sept. 9.
Market participant concerns regarding ICO-driven ETH sell-offs are not unfounded — in the last month, DigixDAO liquidated 139,400 ETH, placing additional pressure on the market. Ethereum prices have now stabilized above the $200 psychological support level but extended bearish action places ETH in a vulnerable position that could see prices test the $170 support level should the market fail to resist selling interest near the $210.00, $230.00, and $250.00 resistances.
The global cryptocurrency market cap stands at $195.12B with a 24 hour volume of $10.76B. The Coinbase Index is currently sitting at 2359.1. Bitcoin dominance is currently at 55.76%.
The week-long bearish trend saw both Bitcoin and Ethereum drop in price dramatically, dragging down altcoins across the board in a chaotic sell-off. Recent market movements, however, have reflected predictions made by ShapeShift CEO Erik Voorhees in late August, who stated that the crypto market is “done with a majority of the collapse.”
Cover Photo by Jeff Finley on Unsplash
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