Just as we discussed in our last update, the weekend brought a change in Bitcoin’s market price as the long-awaited SegWit2x update was cancelled after failing to gain enough support. Not long after the news spread online, Bitcoin saw a big sell-off that gradually took the price down, culminating in a Sunday finale when Bitcoin finished the day with over $1,000 of its last week’s price cut off.
At the same time, Bitcoin’s offshoot, Bitcoin Cash, rose up to nearly $2,500 in a trading wave that surged its market volume to record highs of $10 billion. Still, since the Sunday sell-off, Bitcoin Cash crashed back nearly 47% while Bitcoin picked up and has stabilized near the $6,900 range.
According to a CNBC report, Bitcoin’s price drop might be a temporary snag before a future spike within the next month. The report is based on GGT (Genesis Global Trading) data, which showed that with each drop by over 20% in Bitcoin’s price during this year, the cryptocurrency gained a 28% average within two weeks. Based on this market history, Bitcoin has gained an average 61% in the four weeks after a 20% drop, a trend that might occur again in the following month.
During the past week, Bitcoin’s price went from being close to $7,500 to dropping nearly $2,000 in the course of five days. The lowest point of $5,584.55 was reached on early Sunday morning, while the highest the price got was $6,811.19 on Monday. As of now, Bitcoin is again nearing $6,900 thanks to a bullish market sentiment.
Confirming the big sell-off are the trading volume numbers, which show that at its lowest price point Bitcoin’s trading volume hit $6.8 billion, only to reach nearly double that value in a rapid buying wave from profit makers. However, since then the trading volume has gradually declined and is now sitting at $3.36 billion while the market cap is at $116 billion.
Our technical analysis shows that the current market trends are pro-buy, with 8 out of 12 oscillators and 11 out of 12 moving averages sending a buying signal. The SMA 100 is over the SMA 200 on this time-frame, showing that the upward path is where the least resistance is. However, short-term signals are also showing a bearish wave forming that could take the price down further if it crosses over the $6,600 support. So, keep your eyes on your Bitcoins in the next few days.
Is Bitcoin Still a Reasonable Payment Method?
With the massive price upticks we’ve witnessed over the past months, Bitcoin’s transaction rates have also gone high, casting doubt on the practicality of using Bitcoin as an everyday payment method. With mining becoming more and more exclusive to the big mining pools (despite the fact that the block size has remained the same) and the increasing interest Bitcoin has seen over the past year, the cost of having a fast and efficient transaction has gone quite higher than it used to be.
According to Bloomberg, the median transaction fee for processing a median transaction of 226 bytes has gone up to $11.38 in BTC on Tuesday, rendering small purchases through e-stores or coffee shops unpractical and uneconomical. Especially with so many investors flocking to the market and paying premium fees for faster transactions in order to capitalize on the swings, the everyday use of Bitcoin payments is getting left behind in the shadows, thus verifying Bitcoin’s long-lasting transition into a trading asset and a form of payment practical mostly to people who prefer to keep their transactions private.