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Bitcoin’s Summer Slump

08/09/18 Update


Bitcoin is most definitely in a “summer slump”. Even in the face of multiple extremely bullish news items, the fragility of the bear market has overpowered any opportunities of bullish momentum. It’s amazing that Bitcoin plummeted over 10% simply based on the news that there will be 45 day delay of the ETF decision. Talk about fragility. I can’t imagine what will happen to the price if the ETF is denied.


According to coin market cap, Bitcoin volume is just over $5.4 billion today, with a total market volume at $16 billion, up $5 billion from Monday. However, the key thing to pay attention to is the market capitalization. There was a very strong support at $250 Billion that had been tested three times this year, each time resulting in a successful bounce upwards from there. This time around things look bleak. The support was breached by a massive panic sell off and the now current market capitalization is sitting at $223 Billion, a level unseen since November 2017, the month prior to the historic run up and subsequent crash. Because this long term support was broken, we expect there to be more downside from here, although how far down it might go is uncertain.

Ethereum Classic:

Ethereum Classic is now listed for trading on Coinbase pro and the Coinbase app/website. It’s currently trading for $15.20 down 12.05% on the day with over $400 Million in volume. The selloff is likely a combination of the overcrowded nature of this trade and the fact that Bitcoin took a 10% hit today. The current crypto environment is simply not ripe for ETC to make big upward moves, not to mention the lack of buy volume to support it. In the short term, we expect it to move down with the entire market. Although, as bitcoin finds a bottom and things start to flatten out, it’s likely we will see some positive price movement from ETC. Overall, the main issue right now is that there is too much uncertainty around bitcoin price and volatility of this market for people to have enough conviction to buy anything. Bitcoin and all altcoins are WAY oversold and short traders are getting very greedy making “easy money”. With that being said this uncertainty is putting all coins in the “no trade zone” so it’s not surprising to see ETC, along with BTC and other alts, suffering today.

Other News:

In other news, financial regulators from around the world formed the Global Financial Innovation Network or GFIN to help promote and develop new technologies, with blockchain leading the pack. The main goal of the GFIN is help these new technological innovations and bridge them into financial industries around the world. According the to the Financial Conduct Authority website, the GFIN received excellent feedback amongst its applicants. Issues in the feedback such as “artificial intelligence, distributed ledger technology, data protection, regulation of securities and Initial Coin Offerings (ICO’s), know your customer (KYC), and anti-money laundering (AML) were highlighted. Notable members of GFIN include:

  1. Australian Securities & Investments Commission (ASIC)
  2. Bureau of Consumer Financial Protection (BCFP, USA)
  3. Financial Conduct Authority (FCA, UK)
  4. Hong Kong Monetary Authority (HKMA)
  5. Monetary Authority of Singapore (MAS)
  6. Ontario Securities Commission (OSC, Canada)

While the GFIN is still in its infancy stages, it is important to note progress of blockchain, as these members are major players in the global financial market. These regulatory bodies aim to propel these innovative technologies into industries within their respective countries, a step that is crucial to the success of blockchain around the world.

Wrap Up:

To conclude this update for August 8th, investors seeing the irrational sell off of major cryptocurrencies need to take a deep breath and let the market play out the way it wants to. Around this time of last year bitcoin futures were announced and what happened? Prices plummeted. Take into account that bitcoin futures was the most bullish announcement of 2017. No one can explain the sell-off and lack of confidence we are currently witnessing now. In fact it is painfully contradicting of the news we are getting! We need to focus on the bigger picture here noting the progress of the underlying technology of blockchain, the institutional adoption and the progress of regulatory bodies surrounding cryptocurrencies. After all the CEO of ICE is a huge fan of crypto currency and has been heard talking about creating new exchanges with products and futures surrounding it. While the delay of the VanEck’s Bitcoin ETF has blinded investors into a massive panic, if you take into account historical trends of Bitcoin on top of monumental news the past few days, it’s clear as to why we remain confident in the long term trajectory of Bitcoin.


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