Bitcoin Price Sharp Drops 30% from 2019 High to Land Near $9,700

    Since June 23, within a two-week span, the bitcoin price fell from $13,868 to $9,711, demonstrating a sharp correction of nearly 30 percent.

    The “Real 10” volume of bitcoin, which refers to the total verifiable volume of the dominant crypto asset taken from ten exchanges verified to have real volume above $1 million by Bitwise Asset Management, remains above $2.9 billion, a high figure compared to March.

    In March, the Real 10 volume was hovering at $300 million with the majority coming from the CME bitcoin futures market and Binance.

    What is triggering the downward movement?

    Historically, the bitcoin price has tended to record pullbacks in the range of 30 to 40 percent following an extended period of strong momentum and upside movement.

    Year-to-date, the bitcoin price has increased by more than 176 percent against the U.S. dollar inclusive of the recent 30 percent pullback, solidifying itself as one of the best performing assets in the global market.

    However, on July 1, as CCN reported, a whale or a large bitcoin holder placed a $200 million short order on Bitfinex, immediately crashing the market.

    The filing of the $200 million short contract came after gold, the go-to safe haven asset for many investors, recorded its biggest drop of the year subsequent to the resumption of trade talks between the U.S. and China.

    Although unlikely, it is a possibility that developments in the U.S.-China trade dispute boosted the sentiment in the global equities market, leading investors to sell liquid assets like bitcoin to re-enter the stock market.

    Earlier this year, when uncertainty in the global economy intensified, the interest in bitcoin in China increased significantly based on search engine data.

    “There’s been a lot of talk about how China has been the driver behind Bitcoin’s move up since the first week of May. So I decided to look into bitcoin Baidu trends (China’s Google). China’s bitcoin popularity has definitively been on the rise,” global markets analyst Alex Krüger said at the time.

    Diar, an institutional weekly newsletter, also reported that the on-chain volume of Tether, the most widely utilized stablecoin in the crypto market, hit a new all-time high in 2019 as a result of rising volume from China.

    “On-chain data shows Tether movements hitting a new all-time-high for 2Q19 with one month left on the calendar for the period. What is most striking, however, is the volume coming in and out of Chinese exchanges dwarfs western and global trading venues and accounts for more than half of the total transaction value of known parties,” the Diar report read.

    The recent correction of bitcoin is generally believed to be a technical movement rather than fundamental; there is no sufficient data to conclusively state that the U.S.-China trade developments affected the near term trend of the asset.

    Still, if bitcoin is increasingly considered as an alternative asset to gold and other safe-haven assets, it may be worth acknowledging various macro developments and their effect on the asset class as a whole.

    Alternative crypto assets take a hit

    As the bitcoin price dropped, alternative crypto assets, which performed poorly against bitcoin throughout the past two months, have dropped substantially.

    Ether, the native asset of the Ethereum blockchain network, dropped by five percent on the day and XRP, Litecoin, Bitcoin Cash, Binance Coin, Tron, and Cardano dropped by similar margins against USD.

    Click here for a real-time bitcoin price chart.

    Stay in the Loop

    Get the daily email from CryptoNews that makes reading the news actually enjoyable. Join our mailing list to stay in the loop to stay informed, for free.

    Latest stories

    - Advertisement - spot_img

    You might also like...