Bitcoin Drops to $8,000 During Consensus 2018

The price of Bitcoin has dropped close to $8,000 in the past week since our previous update as the market turned bearish in the eye of the Consensus 2018 conference in New York, fueled heavily by rumors about a huge sell-off of thousands of Bitcoins from a Mt.Gox trustee.  Marking a loss of over $500 in a matter of a few days, the world’s biggest cryptocurrency has been struggling to break out while market signals indicate that the struggle may not be over yet.

The Consensus conference is one of the biggest annual events for cryptocurrencies that’s attended by key figures from the cryptocurrency and financial sectors as well as big investors. As reported by the Independent, this year’s conference was expected to bring a boost to Bitcoin’s price, just like the previous conferences have. According to Fundstrat’s Tom Lee, Bitcoin was expected to once again rally during and after the conference since the previous events have given Bitcoin a boost of 10-69%. However, thanks to a predominantly bearish market, this year’s event only brought an uptick of around 5%.

Bears Hold the Market

The last 7 days have been hard for Bitcoin as the cryptocurrency began sliding right after Thursday when news about the move of 8,200 BTC from a Mt. Gox wallet hit the web. The best price point during this time was reached on Thursday afternoon, when Bitcoin briefly traded for $9,395.52, while the lowest point was hit today in the early morning hours when Bitcoin reached $8,179.95.

Coinciding with the price slide on Thursday was a sharp increase in 24-hour trading volume which climbed from $6.8 billion to nearly $9 billion on Friday. But things have normalized since then and the trading volume is now at $7 billion and slowly growing, while the market cap is at $140.7 billion.

Our technical analysis hints that the price will still need to wait for a bounce back as 9 out of 12 oscillators and 11 out of 12 moving averages are in the red zone, signaling a strong selling trend. The SMA 100 has also dropped below the SMA 200, showing that the path of less resistance is downwards. And even though Stochastic is showing oversold conditions, hinting that sellers might get tired soon, the overall signal is still heavily pro-sell. If the strong bearish sentiment continues, we might be looking at another push downwards.

Research Firm Says Institutional Money is Coming to Bitcoin

In other news, international research and consulting firm TABB Group is claiming that 2018 will be the year when institutional money will flow into the cryptocurrency sector, CNBC reports. According to a Tuesday report from a senior analyst in the firm, Monica Summerville, if the past year was a time when cryptocurrencies became “mainstream”, then this year is likely to be the year when “they go institutional”.

The analyst reports that individuals from the wholesale financial markets have spotted a “significant market gap waiting to be filled” and that they are leading new tech providers to enter the cryptocurrency sector. Summerville bases her prediction on “a word of the street” that additional institutional money is being accumulated until the proper conditions to enter the market appear. Her estimate is that this institutional money will begin flowing in this year.

Thus far, the main obstacles that stand in the way are the lack of institutional data sources, proper market infrastructure, and the uncertainity of regulation. But if the trading infrastructure improves this year, as it is predicted, it will remove the first obstacle for institutional backers and their money.


Share this

Share This