Bitcoin and the cryptoasset markets inched back toward yearly lows in the wee hours of January 28 (UTC), after BTC’s price fell to near $3,400.
Ethereum (ETH) tumbled along with Bitcoin, and is again lingering near double digit prices. The cryptoasset market moved down basically in unison, as is tends to do, following Bitcoin’s lead.
The price hits come after a week of generally low activity in the markets, where Bitcoin fluctuated mostly in a narrow hundred dollar range.
(source: CryptoCompare)
At Least It’s Not Raining
Accounting for the lack of price action and volatility, crypto analyst and trader Alex Krüger identified a number of factors putting a damper on the markets.
For one thing, a rash of delays and disappointments have hit the industry in the last few weeks. The institutional bitcoin future product Bakkt is currently delayed indefinitely, after first being pushed to a January release; and the hotly anticipated VanEck SolidX Bitcoin ETF was also scrapped, largely due to the US government shutdown and the uncertainty it has left in its wake.
In addition, Ethereum’s planned “Constantinople” upgrade/fork was also delayed due to the discovery of a potentially critical bug.
Krüger claims that the increasing closure of North American BitMEX accounts could also be negatively affecting market activity. BitMEX denies the claims made by South China Morning Post that they are losing customers in the U.S., maintaining that they have banned U.S. traders since 2015, however, high profile traders such as Tone Vays who is from the U.S. had his BitMEX account banned in late 2018 after using the account to trade and gain affiliate income.
He also points to abysmally low interest in cryptoassets as evidenced by Google Trends, saying that interest has not been this low since April 2017.
(Global interest in “Bitcoin”; source: Google trends)
Krüger also pointed to indications that the cryptoasset market has gone into an accumulation phase, as wallet activity is decreasing. Delphi Digital has conducted UTXO analysis in recent months to arrive at the same conclusion – which also suggests that markets will be less exciting.
For someone to accumulate, someone else has to distribute. It is a zero sum game. Accumulation per se is neither bullish nor bearish. With the current trading volumes, I'd bet on exchanges and miners currently “accumulating”. Eventually they will likely start dumping again.
— Alex Krüger (@Crypto_Macro) January 25, 2019
At least one notable exception to the lack of excitement was the recently launched Grin Mimblewimble privacy coin, which saw nearly 400% of gains in the last few days.
(GRIN privacy coin; source: Coingecko.com)
The overall cryptoasset market capitalization at time of writing sits at $114 billion, down about $5 billion in the last 24 hours, according to Coinmarketcap.
