Bitcoin continues to “lick its wounds” after a devastating correction at the start of the week, pushing the total market cap up to $213 against lows at $189 billion, the lowest level since late October 2017. This recovery can barely be considered as strong despite of the TOP-100 coins being mostly in the green zone, as their rates are significantly lower than they were before the correction.
Increased volatility rates and mining on the edge of profitability suppresses activity and provokes pressure for exchange rates.
The market critics often blame the second largest cryptocurrency Ethereum (ETH). The rapid growth in the number of ICOs, most of which were conducted on Ethereum basis, turned market participants against the cryptocurrency. This puts the current successful projects in hurry to withdraw (or cash in) gathered coins due to unstable price.
Miners also aim to sell much of their coins, albeit inflow of the new investors is very limited now. The industry veterans try to wait out the losses or turn into long-term investors. The sum of these factors drastically decreases the cryptocurrencies trade volumes and their daily usage. From this point of view, the market is in a deep depression and we might be looking at a mass-scaled liquidation of both the investments and the mining capacities.
More short-term technical analysis, however, shows a slightly more optimistic picture. BTC successfully fought off bears’ attack and managed to stay above $6000. Cautious purchases have returned the benchmark cryptocurrency to $6500 mark and are causing its growth for the third day in a row. Despite of the depressive market condition investors prefer to buy dip Bitcoin, and this is a definitely a good sign. The growth in trade volumes in periods of strengthening also confirms positive mood among the market participants.