Published: March 2nd, 2020
– From about the second week of February, the cryptocurrency markets have been alive with all the major currencies surging. Bitcoin gained more than $2,500 to break the psychological $10,000 mark for the first time this year. Then, the mixed reactions from the global economy and the fears that grew amid the spread of the coronavirus lead to low uptake. The situation quickly degenerated leading to sideways trades in the last week of February. The last hours of February, however, brought some element of certainty as Bitcoin, Ripple, and Ethereum all confirmed that they are all comfortable taking a dive, at least for the time being.
Bitcoin, Ethereum, and Ripple all looked submissive and resigned as the markets assumed a downtrend. The three coins all lost the major gains that they made in February. The world’s first cryptocurrency dipped past the $8,800 after posting an intraday high of $8,898 on Friday, February 28.
Initially, the markets looked bearish, especially, during the European trading hours. However, bulls seemed to have taken control of much of the Asian trading session. The two extremes balanced out in the end.
At the close of trading on Friday, Bitcoin had lost 0.25% of the opening value. However, the low volatility levels recorded suggested that neither a further downward or an upward movement was highly unlikely.
Bitcoin now hovers between $8,600 and $8,800 after recovering from a low of $8,438.86 on Sunday, March 1, 19:00 UTC. These figures indicate a drop of almost $1,600 from the psychological $10,000 that the cryptocurrency tested on Monday, February 25.
Ethereum’s value proposition to the dollar almost mirrored that of Bitcoin. It seesawed around the $230 region and at one point hit the intraday low of $226.64. The coin’s misery must have been propelled by its failure to rise above the $235 resistance level.
Attempted recovery later on Friday to go past the $240 level was curtailed at $235 when the bears swung into action. The resulting transactions amounted to sideways trading that saw the coin consolidate its losses around $230.
The tentative support that the bulls established at $230 seemingly was not enough to sustain a strong price. By the close of day trading on Friday, the cryptocurrency was swaying around the $225 level. However, it showed signs of building a bearish momentum. It will be interesting to watch Ethereum’s action in the coming weeks. A strong rally may see it eying $300 but the chances of that happening are 50-50 at the moment.
Ripple was not spared the slide. XRP/USD failed to go over the $0.245 hurdle and chose, instead, to take in fresh losses going into the weekend. At the close of Friday’s daytime trade session, the price was wavering around $0.237 with the support level resting at $0.23. However, if the coin shatters this level while descending then the recently established $0.220 buyer congestion zone will be the salvation point.
Despite the temporary bad news that the top three cryptocurrencies grappled with, not all was gloomy. Seven coins from among the top 100 cryptocurrencies made actual gains on Friday and going into March. The seven rose by between 7% and 21%.
By the end of the trading session on Friday, Selfpay (SXP) was standing at $1.06, a surge of 20.92%. Kyber Network coin (KNC) was trading at $0.5728 which translates to a gain of 19.87% while Bytecoin (BCN) stood at $0.0005, a surge of 16.29%.
Other gainers were NEM which sold for $0.0505 representing an increase of 7.09%. PRIZM (PZM) was up 11.59% trading at $0.2122. Chainlink (LINK) closed the Friday trading sessions at $3.94 which represented a surge of 7.26%, and Maker (MKR) was trading at $586.21, an increase of 8.76%.
While the price action of Ethereum was sending gloomy signals, the volume of the cryptocurrency’s derivatives listed on the newly established Hong Kong FTX cryptocurrency derivatives exchange rose by 50% from $162 million to a record $245 million in just three days.
The highest volume of Ethereum futures previously recorded on the exchange was on February 20, when some $189 million worth of futures were keyed in.
The volatility of cryptocurrencies is too well-known. The prices recorded recently, however, do feature some oddities despite remaining within the model. One Bitcoin enthusiast thinks that this is all because of the Bitcoin maximalists.
According to Roger Ver, the CEO of Bitcoin.com who is also an early investor in cryptocurrencies, the unusual volatility is caused by Bitcoin maximalists who do not understand the real objective of the cryptocurrency project. Ver says that maximalists are in it for the profits. For that reason, the vast majority of them hold only one coin whose price they pump as high as they can.
He adds that if everyone stuck to the goal of seeing cryptocurrencies undermine the ability of the central governments to reign over peaceful people, then the unusual price surges would not be so common.
All the three cryptocurrencies have good prospects going into March.
The volatility levels that came with the downtrend were mild, meaning that a substantial move in either direction is possible. However, the currency markets are in the mire. When fiat is in trouble, cryptocurrencies often walk in towards the opposite direction. Cryptocurrencies, as such, may come by good fortune soon and surge. If history is anything to go by, then Bitcoin, Ethereum, and Ripple will likely recover some of the gains they shed, and this may happen as early as the first week of March.
The top three cryptocurrencies experienced rough patches towards the end of February. Several reasons may have compounded the downtrend. An industry insider, however, thinks it is the Bitcoin maximalists at hand. Since the Bitcoin price action often affects that of other cryptocurrencies, the fall that Ethereum and Ripple experienced is reasonably within this explanation. That, notwithstanding, March will likely be good for the three coins. All are expected to recover since the volatility levels provide for movement in either direction, but mostly the positive side.