Looks like there might have been something to the impending selloff rumor last week… it happened!
“The rally over the last two weeks is holding despite rumors of an impending selloff.” – Coin Savage Weekly Update 9.4.18
Several theories exist as to the selloff catalyst, read What Caused the Bitcoin Dump on September 5th? for an in-depth analysis.
Is the Bear Market Reaching its Peak?
Ethereum (ETH) is getting crushed and leading the charge lower in altcoins. Bitcoin is holding above major support. So what are the possible ways this all plays out? I see three possible scenarios:
1) We are witnessing the “calm before the storm”. Bitcoin, unlike the other cryptos, has held above major support. If Bitcoin were to break support at ~$5800 then the “storm” has arrived and the crypto market is in for serious pain.
2) The crypto market is bifurcating. Bitcoin remains above key support, but the rest of the market continues to follow Ethereum lower. Bitcoin continues to attract investment as a “digital gold” store-of-value while Ethereum-like smart contract platforms and applications undergo a crisis of confidence. The price action in Ethereum (ETH) is terrible for the bulls, at least Bitcoin has held support.
3) Bitcoin remains above key support AND the rest of the market stops selling off. In this scenario the market begins to stabilize as sellers reach exhaustion and buyers begin to respond to recent positive developments:
Bakkt is Coming!
– Microsoft, Starbucks, and ICE (the owner of the NYSE) have partnered to create Bakkt. Bakkt is designed to enable consumers and institutions to seamlessly buy, sell, store and spend digital assets. Bakkt will provide the infrastructure for large scale institutional fund flows into crypto.
I don’t think the story is over for Ethereum, although a flush to the $100 – $130 range is not out of the question if Scenario #2 plays out.
Scenario #3 seems most likely as the nine month old bear market may be reaching exhaustion and the news cycle is turning positive. This market seems like the inverse of the January 2018 crypto market. In January it was extremely Bullish, now we are extremely Bearish… and ripe for a turnaround.
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