The king of crypto and the broader digital asset market are currently in a downward trend as prices plunge further. Bitcoin’s value has plummeted by over 10% since Friday, August 19. This happened when many liquidations had impacted the more significant crypto market.
Data from CoinMarketCap shows that the price decline of Bitcoin has a spillover effect on the global crypto market cap. Meanwhile, the current market valuation of the crypto industry is $985 billion, a fall below the $1 trillion threshold for the first time since temporarily crossing the mark on August 20.
The massive sell-off is due to the negative sentiments from significant crypto exchanges, which analysts see as usual. Investors will likely take advantage of the drop and buy the dip before the price reverses.
Another Bearish Period for Bitcoins?
Emboldened by the brief price surge, the flagship digital currency was attempting another bullish rally. However, the market has yet to fully recover, hence the pullback in value for most top tokens.
Most of the leading exchanges do not experience any inflows during the summer. Traders have avoided taking a plunge and buying the dip at discounted prices.
At the start of the new week, Bitcoin was trading at $21,165, a 1.19% drop on the day and a further 12.47% drop in the past week. During the same period, the market capitalization was $404 billion. Notwithstanding the price drop, Bitcoin’s long-term position interest is still at its highest over the past year.
Although stakeholders continued to believe that the value of Bitcoin would rise despite the price drop, the sharp decline in BTC to $21,000 is a stark example of the problems the cryptocurrency sector is currently facing.
Regarding the impending Merge upgrade, Ethereum (ETH), the second-largest asset by market cap, is down 2.97% on the day and 17.27% over the past seven days. Ethereum’s market valuation is $192 billion.
Price Rock-Bottom Still a Long Way
Most market observers were expecting a price bottom for Bitcoin, but the previous crash was one of the biggest for BTC. However, there is no certainty that the price decline will continue as Bitcoin’s price is yet to tank.
Following the correction that triggered a rebound in both crypto and stock markets, Bitcoin has bounced back briefly. It has surpassed the 50-day moving average (MA), making it the king of digital currencies to attain new heights.
Meanwhile, the value of the USD against other fiat currencies is putting a lot of pressure on the crypto market. Experts forecast an extended reversal period for cryptocurrency similar to that of 2018.
Willy Woo, an experienced Bitcoin investor, says the crypto industry should brace up for another peak. The 2018 pattern is about to play out in the current price direction, which explains the rise and fall of asset value.
Woo added that the bearish phenomenon is a periodic market condition and does not see any reason for panic.