Bitcoin and a few major altcoins have shocked the market as they have shed significant weight in a considerably short time. Right now, the crypto market prices have lost billions and there is no pointer to a bull run in the near future.
The entire crypto market has been in a free fall of sorts for more than a few hours now. On Wednesday the 28th of August and in less than an hour, Bitcoin price plunged more than 5% losing more than $500 to just a little above $9,600. It has since dropped a lot further and is trading around $9,537 at press time.
This fall was also felt by the major altcoins as Ethereum price has also lost >6% shedding off more than $20 in the same period. At the moment, ETH is trading at $169 and is still struggling to keep up.
Sadly, XRP is also bleeding. Recently, Ripple’s investors have been decrying the firm’s consistent dumping of XRP which some believe is the reason for XRP’s stagnancy. Regardless of the current free fall, 2019 has been a relatively interesting year for the market especially since the 2018 bear market ended.
However, XRP has not gained significantly as can be seen with most of the market. The altcoin lost more than 5% as well in this same period, dropping to $0.254 and has further lost a bit more to its current $0.251 at press time. The XRP situation also seems to be degenerating because currently, Ripple is trying to fight off a petition by an XRP investor who is seeking to fork XRP if the company does not end its incessant dumps.
At this time, there is no visible ray of light at the end of the tunnel. In the period with the largest drops, the entire crypto market cap took a hit as well as it lost almost $14 billion, hitting $252 billion. If there was however any light at all, it has further dimmed, as the market cap has lost an additional $8 billion and hit $244 billion.
What Exactly is the Problem?
Right now, no one can give with absolute certainty, the real reason why the market is bleeding. However, as with any other significant market occurrence, there are a few possible factors. Recently, a lot has been said about China’s own virtual currency by the country’s central bank especially as its ongoing war with the U.S. rages. It is thought that an eventual rise in the adoption of China’s digital Renminbi could have terrible repercussions on Bitcoin.
Our speculation for a more plausible factor, however, which has also been corroborated by more than a few analysts, is the termination of the CME Bitcoin futures. Skew, a market analysis outfit, has highlighted that about half of all CME open interests will expire this week. The Skew team also mentions that even though there’s a good chance, not all the positions will be discontinued, “institutional investors have been looking elsewhere in August.”
The CME factor is a lot more plausible because a close of the CME Bitcoin futures is usually attributed with sharp price volatility and even Bakkt’s recent announcement of its decision to begin physical Bitcoin storage services on the 6th of September, did nothing to stop the market from shedding heavy weight.
To put a fine point on it, Bitcoin whales most likely embarked on a massive dump in anticipation of the CME Bitcoin futures close. As a matter of fact, this is probably the last time there will be a monopoly in the CME futures market because Bakkt has set Sept 23rd as its launch date for physically settled ones. The market can only hope that crypto whales (read mafia), will no longer be able to manipulate prices as much, after Sept 23.