Market Overview, September 3–9, 2018
Our guess from the previous overview was that the situation would develop in a positive way. But the cryptomarket is full of surprises, especially in everything that concerns manipulations. On September 5, the new trend was broken in an instant. Bitcoin got back to the range of $6000-$6600 and was trading at the $6400 markpoint on Sunday evening. Ethereum had the largest drop in price having lowered by 36% in a few days. The volume of margin positions for the lower ETH price has doubled since September 5 indicating that volatility will stay high in the next several days . We’ll get back to this point a bit later.
Now let’s discuss the reasons of the crash. As for Bitcoin, it’s most likely that it reveals its weakness due to the fear of the future fall. Here’s the quotation from the previous overview: “It’s worth mentioning a spike in short positions on September, 2. At the Bitfinex exchange, bear stakes grew by 52% in 24 hours, which is very rare. Thus, some traders don’t believe in the development of a new upward trend or they have some insider’s information.” In a couple of days it became clear what traders put their stakes on. Experts noticed tens of thousands BTC moving through Bitcoin-wallets with 30 000 BTC released to the open market (Bitfinex and Binance). They were sold very quickly despite the price crash. There were no significant negative news afterwards, thus it must have been manipulation. There is even some positive agenda, but we’ll cover it in the next overview as some of the information needs to be additionally verified. All this information on Goldman Sachs and Co is too controversial.
Let’s also add a couple of words on the Ethereum situation. Firstly, the ETH market has also experienced a major sale. About 200 000 ETH were sold in the open market in a short period of time. It led to the market crash, of course. Secondly, there are a lot of comments and remarks about Ethereum competitors and their strength, about ETH suitable for ICO only, etc. Then there were speculations that projects with ICOs were going to sell even larger volumes. Yes, that is possible, but the projects don’t want to sell short as well.
Vitalik Buterin suggested that the times of 1,000-times growth were gone and the blockchain space was getting to the point where there’s a ceiling in sight. Even if the Ethereum founder is wrong about the ceiling, it’s hard to disagree that the blockchain market is not endless and its growth is limited. And Ethereum has already taken the major part of this market. Competitors (such as NEO, EOS, Ziliqa, VeChain, etc.) will have hard times trying to make their way to the leaders: the number of competitors is growing, the market is limited and its major part is taken by Ethereum. So it’s too early to bury a decentralized smart-contracts computer. By the way, Ethereum network, unlike its closest competitors, already has thousands of smart-contracts. To illustrate this, I’ll provide the number of active addresses in the networks mentioned above: Ethereum — 320 000, NEO — 12 000, EOS — 4000, Zilliqa — 500. Feel the difference.
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