Crypto currencies are largely lower as traders and speculators continue to worry amid the prevailing risk aversion, negative sentiment and souring mood.
Bitcoin has lost upward traction in the past couple of days to drift around its lowest level since late June and is now threatening below the psychological support level.
Any upside momentum is capped near US $34,000 while downside pressure needs to break below the psychological level of US $30,000 to extend any breakout. In the short-term, speculators are keeping an eye on US $30,000. A break could exacerbate a quick fall back towards mid-US $20,000 due to subdued trading and evaporating buyers.
As broader sentiment appears to be souring, it’s coming under renewed pressure and can contract further over the weekend.
As of press time, among Top 10, Bitcoin (BTC) is changing virtual hands at US $31,750, Ether (ETH) at US 1,937, ripple (XRP) at US $0.61, Binance Coin (BNB) US $318, cardano (ADA) at US $1.22, Dogecoin (DOGE) at US $0.18, ChainLink (Link) at US $16, UniSwap (UNI) at US $17, Polkadot (DOT) at US $13 and Stellar (XML) at US $0.24.
Investors and traders are growing increasingly nervous amid fleeing buyers and negative outlook that may open up a downward spiral, adding to the challenges facing digital asset holders in the market that has lost more than half of its capitalisation over the past couple of months.
Buyers feel with little or no profit likely out of fear that the persistent downturn could be just a little taste of what has to come.
Current trading volumes simply point to subdued trading activity with more sellers in control than buyers which continues to provide headwind to the overall cryptocurrency market trend.
Seasoned investors refer to this concept as Greater Fool Theory, which holds that the price of an asset is determined by whether you can sell it for a higher price, at a later point in time as the asset’s intrinsic value is less important than the increase in demand, however irrational it might be. The person buying the overpriced asset later on, for a higher price, is deemed the greater fool.
The actual slowdown in the market takes its roots back to early May when President Joe Biden’s capital gains tax (CGT) hike hit the news, triggering cautious market sentiment which eventually let to high sell volumes.
There have since been a wide range of stricter regulation announcements from different countries in relation to trading, mining, and using cryptocurrencies. Further restrictions in China has particularly impacted the market as it is one of the biggest participators in the cryptocurrency market by both the number of traders and volume of trading but also is one of the most regulating countries in the world.