Market overview, July 16–22
In the previous overview we mentioned that Bitcoin had been consolidating in the $5800-$6800 range for too long. But as early as July, 17, the price went out of this range and Bitcoin was traded at $7500 on Sunday evening. During the whole week the price was kept flat and there was no significant growth correction. It’s still too early to talk about a proper turn. Anyway, most altcoins failed to demonstrate their growth in USD; and at the same time continued running down paired up with BTC. In most cases, altcoins have a deferred price growth, so if Bitcoin keeps on recovering, bids are most likely to return to the whole market.
Market total cap grew by $35 billion in a week, but Bitcoin contribution is crucial and its dominance index exceeded 45%. By the way, it was around this markpoint when the turn happened last time. In April and May many altcoins demonstrated 50%-100% of the correction growth in a month.
Media background could be considered as moderately positive. Coinbase CEO Brian Armstrong announced that the company was whitelisted for Facebooks ads. “We’re back introducing more people to an open financial system”, said Armstrong. This comment could be considered as a very sincere, but it reflects the expectations of many cryptotraders. The market needs the flow of new investors to increase its liquidity as well as to broaden the audience of blockchain products.
There is some positive regulatory news as well. Financial Services Commission of South Korea (FSC) is going to establish a new state-backed department, Financial Innovation Bureau, to deal with financial technologies and to develop cryptoindustry regulating policies. New division will be responsible intensifying investors’ security, supporting financial innovation, studying industry problems and finding solutions.
Technology events of the week include Vechain mainnet launch as well as the release of the last Testnet for Raiden, Ethereum payment channel. Raiden protocol allows users to trade ETH on off-chain channels reducing traffic on mainnet. This is one of the points of the Ethereum scaling plan.
As for the possible price dynamics next week, it’s worth mentioning two important factors. Firstly, from the technical viewpoint, Bitcoin consolidation period is over and it’s moving towards $8000 and not $5000. USDT emission is still on, there is new liquidity on the market. Secondly, in terms of investors’ and traders’ psychology, most of them made sure that the bottom had been reached and there was no point in waiting Bitcoin to be traded at $4500. Barry Silbert, CEO of the Digital Currency Group, also says that “Bitcoin has probably hit the bottom for the year”. We wish he was right!
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