Cryptocurrency Market Slump Extends as Bitcoin Remains Below $8,500
Since yesterday, March 25, the cryptocurrency market has struggled to rebound to the $350 billion region. Apart from some small cryptocurrencies like Ontology and Ethos, most cryptocurrencies like bitcoin have recorded a slight decline in value.
Bitcoin and Ethereum Keep Yesterday’s Levels
Since March 25, both Ethereum and bitcoin have struggled to record any major gains or losses. The price of bitcoin declined slightly from $8,580 to $8,490, by just over 1 percent. Over the past 24 hours, bitcoin’s daily trading volume has been $4.5 billion, which is three times larger than that of Ethereum.
But, Ethereum has not been able to sustain a high daily trading volume. In fact, Tether, a cryptocurrency that is hedged to the value of the US dollar, has been the second most liquid cryptocurrency in the market, with a daily trading volume of $1.4 billion.
Tether is always an interesting indicator to consider when evaluating the state of the cryptocurrency market because the vast majority of cryptocurrency traders use Tether, instead of fiat money, to hedge the value of cryptocurrencies.
Binance, the world’s largest cryptocurrency exchange, process cryptocurrency-to-Tether pairings, allowing users to hedge cryptocurrencies in periods of extreme volatility. Often, abnormally high daily trading volume of Tether signifies instability in the cryptocurrency market, and an increase in the number of users hedging the value of cryptocurrencies to reserve currencies.
A few days ago, CCN reported that Changpeng Zhao, the CEO at Binance, stated volumes are back on most exchanges. Still, in comparison to early March when the price of bitcoin reached $11,700, the trading volume of bitcoin and other major cryptocurrencies like Ethereum remain quite low.
Premiums in the South Korean and Hong Kong cryptocurrency markets are also an important metric to utilize to measure the demand in the two markets. In South Korea, bitcoin is being traded at $8,723, which is 3.2 percent higher than the US market. On Gatecoin, a cryptocurrency brokerage that processes bitcoin-to-cryptocurrency trades for Hong Kong investors, the price of bitcoin remains in the $9,000 region.
Hence, the demand from major regions is still there, given that premiums still remain high in Hong Kong and South Korea. After the crackdown on cryptocurrency trading, most Chinese traders moved to the Hong Kong market to trade cryptocurrencies.
It is certainly too early to conclude whether the alternative cryptocurrency season has begun. But, several small-scale cryptocurrencies have outperformed bitcoin over the past few days. Today, Ontology and Ethos both recorded a 20 percent gain over bitcoin, while Nebilo and Waltonchain have consistently outperformed bitcoin throughout the past 5 days.
It is plausible that altcoins are gaining popularity because they have generally performed poor against bitcoin throughout February and March. Until the market recovers and major cryptocurrencies like bitcoin achieves $12,000, Ethereum rebounds to $900, and Ripple recovers to $1, it seems unlikely that altcoins will be able to continuously outperform bitcoin.