Bitcoin Continues Its Downward Spiral, As Other Cryptocurrencies Rocket Past – Live Trading News

The year 2020 hasn’t been good for the bitcoin and bitcoin investors, as the cryptocurrency has remained in a perpetual downward plunge for the past few months. 

In July 2020, things seemed fine as bitcoin experienced its highest price surge in the past year. This resulted in a sudden uptick in bitcoin trading

Investors were optimistic and assumed they were looking at a newly-emerging bull market, only to land in a bear-like market just a few months later. 

Since August 2020, the cryptocurrency has struggled to cross the $12,000 mark. This, despite seeing a spike in trading in the March-July period, when crypto wallets globally experienced an 81% YOY growth in the number of installations. 

As of writing, bitcoin is trading at $10,305, a value which is 8.9% lesser compared to the last 24 hours. As prices continue to fall, there is growing concern about the future of cryptocurrency. 

A fall below $10,000 could signify bad times

The falling price of the bitcoin has ruffled the crypto market, with investors stopping just short of panicked selling. Since March, thousands have resorted to leveraged liquidations of bitcoins to prevent a complete loss. On BitMex alone, the world’s largest derivatives exchange for bitcoin, there has been $190 million worth of leveraged liquidations. These transactions have only served to hasten the drop in bitcoin price. 

With the latter half of 2019 still fresh in investors’ minds – a time when the currency valued below $4,000 – there is a growing fear that bitcoin may once again experience the nightmarish time and the market move into a prolonged bear period. 

Many experts believe that the persistent psychological resistance displayed by buyers and sellers against $10,000+ pricing could have something to do with the falling value. Currently, professional traders have begun short selling bitcoins at $10,000, while retail investors have started under allocating for any cryptocurrency over $10,000. This sort of tug-of-war has affected market dynamics and affected bitcoin value. 

 Ethereum overtakes Bitcoin 

The uncertainty in the bitcoin trading market has allowed other cryptocurrencies to gain ground. Ether, the second most popular crypto investment, has spiked in trade volume this year. 

From the past few days, Ether’s dominance over the cryptocurrency market has increased by 14%, and it has seen a 50% rise in price, signifying good times for the currency. One of the main reasons for such a great performance could be the Decentralized Finance (DeFi) programs that have been initiated on the Ethereum blockchain. 

DeFi programs allow cryptocurrency investors to get access to traditional financial instruments on the blockchain, away from the controlling grasp of Governmental or private agencies. Although bitcoin supports DeFi, Ethereum offers greater technological support, and Ether offers more use cases than bitcoin, making DeFi on Ethereum an absolute winner. 

Additionally, the integration of ChainLink into Ethereum has made the platform more invaluable to investors. ChainLink facilitates a seamless merging of blockchain smart contracts with external resources. This has added greater security and transparency to Ethereum smart contracts.   

Minor currencies perform the best 

Not just Ethereum but other minor currencies have been gaining ground as well. Take cryptocurrencies like Tezos (which has seen a price spike of 85% since the beginning of the year), Cardano’s ADA (which has seen a 200% increase in price since May), and Yearn.Finance’s YFI (which has seen a whopping 3500% price surge since the past month) – they have all whizzed past bitcoin very quickly. YFI, in particular, is closing at a staggering $30,000, having started at a humble $1,000 per YFI in July. 

Additionally, both Tezos and Cardano are proof-of-stake blockchains that offer greater token holder participation incentives. Plus, they have a steady supply stream of coins, unlike bitcoin, which has restricted supply. This makes Tezos and Cardano highly-attractive to investors. 

Apart from these, other digital assets that have increased in value are Tron (which has seen a price spike by 36%) and Nem (which has surged in value by 0.89%). There’s also EOS, which is currently in the Top 10 highest valued cryptocurrencies of 2020. The token that supports the EOS.IO blockchain, the long-term potential of EOS, has made it quite attractive to investors. It also doesn’t hurt that EOS has brought investors an ROI of 244% since the time of its release. 

What does this mean for bitcoin? 

Trading trends indicate that more investors are diversifying their cryptocurrency portfolio and trading in currencies other than bitcoin. However, all is not lost for bitcoin. 

According to the June 2020 Bloomberg Crypto Outlook, bitcoin’s price fluctuations remind experts of the early weeks of 2017 – which started very slow but turned out to be a year of historic highs for the currency. Many believe that there could be a peak in price sometime in early 2021, which could finally stabilize bitcoin price. 

Additionally, while the price is important, it isn’t everything. Bitcoin has been the veteran cryptocurrency, making it a safe, tried-and-tested investment for many. As the coronavirus pandemic affects the job, healthcare, and personal savings, more new investors are choosing to limit their risks by investing in bitcoin. This could be the saving grace that bitcoin needs to gain steam.

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