Cryptocurrencies Continue to Correct as Bear Market Persists – ThirtyK

It’s another week of losses for cryptocurrencies as the digital currency market continues its steady slide from what analysts say had been an overbought status.

Bitcoin (BTC) was trading at $6,427.17 at around 4 p.m. EDT Friday, according to ThirtyK data provided by CoinMarketCap, down 14 percent from a week before. The cryptocurrency on Wednesday fell to $6,247.97, a low for the week. That’s well below the 2018 high of more than $17,000 in January. Nevertheless, the cryptocurrency is still up more than 80 percent year over year.

Other cryptocurrencies were also down for the week. Ether (ETH) had fallen to $357.40 at 4 p.m. EDT, a 15.5 percent decline from a week earlier, and litecoin (LTC) had slid to $61.83, down 22.3 percent on the week.

Mark Dukas, an analyst at bitcoin.live, tells ThirtyK he sees Wednesday’s bitcoin price drop as an overreaction. So long as the price can hold at $5,777, he says, “I think today’s investors will be fruitfully rewarded in the coming months.” If that level is breached, however, Dukas sees the current bear market lasting another couple of months before the trend reverses.

Dukas sees the market as a buy. “During the bearish times is when you do the executing to invest in yourself and to start to lay your bricks,” he says.

More Noise, Less Signal

Most of the recent price action is “noise, and not a lot of signal,” Jimmy Song, a bitcoin developer, educator and entrepreneur based in Austin, Texas, tells ThirtyK. “Part of what’s happened in the last year is that the market got really overheated on a lot of hype. It was overbought, and it’s come back down.”

Continuing to fuel the price slide have been more delays in the Securities and Exchange Commission’s decision on a proposed bitcoin exchange-traded fund, or ETF. Last month, the SEC rejected a bid by Cameron and Tyler Winklevoss, who founded crypto exchange Gemini, to list the first-ever cryptocurrency ETF on a regulated exchange.

Now, the SEC has delayed a decision on another proposal, from VanEck and SolidX, until at least the end of September. Experts believe an ETF could open the cryptocurrency market to a much wider swath of investors and send prices climbing.

“Investors are looking at bitcoin ETFs as the saving grace for this current bear market,” Dukas says.

Too Far, Too Fast

Tone Vays, a cryptocurrency analyst and trader, and former analyst on Wall Street, tells ThirtyK he anticipates a near-term move higher in price following the recent correction.

“We have fallen too much, too fast,” he says. Vays is looking for bitcoin to climb as high as $7,000 before falling back to $5,000.

Song notes that along with the downtrend in the market, developers have been more active in creating and enhancing blockchain technologies, building for the long term.

Song has his eye on development in the Lightning Network, a “second layer” payment protocol, or software that makes the bitcoin network more efficient, with faster transactions and minimal fees.

Delivering Value

A major theme for cryptocurrencies, says Song, is whether the array of coins are delivering on their promises. Bitcoin, for one, has delivered, while other cryptocurrencies have fallen short, he says.

Ethereum, Song notes, has yet to fulfill its promise of switching to a proof of stake (PoS) methodology.

“The coins that will get value are the ones that actually prove that can deliver on something,” says Song. “That’s the stage of market we’re in. The value prop for bitcoin is obvious. If it stays rare, the more confidence people will have and the price will go up.”

Dukas says, “the fundamentals of bitcoin haven’t gotten worse, they’ve gotten better,” also citing improvements in added layers of technology, like the Lightning Network.

In the meantime, this week the market digested some major news: The Intercontinental Exchange, the New York Stock Exchange’s parent company, has teamed up with companies including Starbucks and Microsoft to create a new crypto platform. The company will be called Bakkt, and will focus on creating an “open and regulated, global ecosystem for digital assets.” The news, however, failed to offer support to the market.