The Bitcoin price has risen by around 2 percent in the last 24 hours, increasing from $6,250 to $6,400. But, the rest of the crypto market is still struggling to gain momentum.
Bitcoin is King in a Bear Market
Since February, the cryptocurrency market has been in a bear market, the third worst in its history. While Bitcoin recorded three attempts to break a major resistance level at $10,000, it failed to gain momentum above the $10,000 mark and crashed to $6,000 after every mid-term rally.
Hence, it is accurate to say that Bitcoin and the rest of the crypto market have been in a long-term correction since February, for more than six months.
Tom Lee, a cryptocurrency analyst and Wall Street investor, said last week that Bitcoin has been the only cryptocurrency in the global market that has been showing some stability and glimpses of recovery. Others, especially tokens, have plummeted in value against the US dollar, demonstrating a free fall.
“Bitcoin’s dominance has been creeping up. In fact, in the last couple of weeks, it has soared to the highest level all year and it has hit about 48%. So it tells us that the news we have seen, from the SEC saying that Bitcoin is a commodity, to ICE’s announcement and a potential for a (Bitcoin) ETF, are causing investors to decide that Bitcoin is the best house in a tough neighborhood,” Lee said.
Today, on August 13, despite the relatively strong performance of Bitcoin, tokens like Zilliqa have fell by more than 10 percent, even after recording a 40 to 50 percent drop against Bitcoin throughout July and August.
Considering the weak momentum of tokens and Ether, the native cryptocurrency of Ethereum, it is likely that the market will continue its downtrend in the short-term, at least throughout this week.
At a low price range, it is important for Bitcoin and other major cryptocurrencies to show stability rather than large upward spikes, as short-term surges in the price of BTC will only be followed by an even larger drop.
If BTC can demonstrate resilience and stability in the region of $6,200 and $6,500 throughout this week with strong volume, a recovery to $7,000 is possible in the short-term. However, if BTC falls below the $6,000 level, it is possible that BTC tests the mid-$5,500 level, similar to the prediction of cryptocurrency researcher Willy Woo.
The instability in the Turkish economy followed by a steep decline in the Turkish lira has shown that government-backed fiat money could be as unstable as cryptocurrencies and other forms of consensus currencies.
In the long-term, it is plausible that fiat users in Turkey, Iran, Venezuela, and other regions that have experienced a rapid devaluation in their national currencies, begin using digital assets as an alternative method of payment.
In the short-term, it is plausible that given the strict capital controls employed by the Turkish government, local merchants and retailers turn to crypto, pushing its adoption up.