WMA: Bloody Sunday as Bitcoin cracks under pressure just 2 days before the halving
Get the weekly summary of cryptocurrency market trends, news, and forecasts!
This Week’s Summary
- The Crypto Market ends the week at a total market capitalization of $242 billion
- Bitcoin ends the week with a 20% drop after reaching $10,000 mid-week
- Ethereum loses almost 12% to trade below $200 once again
- XRP price briefly goes over the 0.20 barrier only to drop below it on the weekend
- Most of the top-20 altcoins are bleeding massively following BTC’s sudden drop
- The COVID-19’s grip on the global economy loosens, but the threat of a major crisis remains
Crypto Trends 04th – 10th of May 2020: PERFORMANCE & ANALYSIS
Bitcoin seemed to fully enjoy the first week of May. The most popular cryptocurrency out there had finally detached from the equity and gold markets. It now stood as an independent asset and one of the few ones that recovered from the nightmarish crisis produced by the COVID-19 pandemic.
The BTC price was trading in the green for at least two consecutive weeks. With just one week left to the much-expected 2020 halving, its value had soared by 15%, and slowly nibbling past the $10,000 barrier. Things looked rosy for Bitcoin on Saturday evening. Then, out of the blue, its price dropped by more than 20%, going as low as $8,117.
The entire cryptocurrency market rattled and hummed as a result. The altcoins quickly followed suit and started bleeding through all their pores. Ethereum lost more than 12% of its value, XRP’s price diminished by 10%, and Litecoin sank by 13%.
While the market recovered a bit in the last hours, the drop was significant for most cryptocurrencies. It seems that the unexpected drop occurred after unprecedented liquidations on the leading derivatives exchange, BitMEX on Saturday night.
Another event that may have contributed to Bitcoin’s massive drop was the second power outage that Coinbase experienced in the last week. The popular crypto exchange took a “nap” for almost an hour on Sunday morning, but it was enough to exacerbate the volatility on the market with less than 48 hours before the Bitcoin halvening.
At the time of this writing, Bitcoin has recovered a bit, and it is aiming to surpass the $9,000 threshold as it is trading at $8,764.
Ethereum also had an enjoyable run in the green for most of the week as it traded between $205 and $215. Before the Sunday drop, the investors were hoping in a bullish attempt that would take the coin over the $220 resistance level.
Unfortunately, Bitcoin’s drop rippled through the market, and at the time of this writing, Ethereum is trading at only $189.79, after falling behind the $189 support level earlier this morning.
Ripple’s XRP is also on a downtrend and trading now at a disappointing value of $0.199 after it was optimistically aiming to cross the $0.226 resistance barrier just one day ago.
Elsewhere, most altcoins are experiencing a double-digit drop in value as the Bitcoin aftershock continues to spread through the market.
What’s in the News?
- Famous US hedge fund manager Paul Tudor Jones confessed at buying Bitcoin as a hedge against the inflation that could be caused by the excessive printing of fiat currency
- A designated team at Cambridge University has developed an innovative Bitcoin Mining Map
- IMF warns of a further drop in global growth due to Covid-19
Next Week’s Market Forecast
In the upcoming week, the most anticipated event of the year will take place – the Bitcoin halving. While the exact time of the halving is not known, as blocks of BTC are mined in segments, the halvening should occur on May 12.
The post-halving status of the cryptocurrency market is the subject of intense debate and speculation. One thing is for sure though, the fundamentals of the underlying mechanism will improve as most of the small and mid-sized miners will become less profitable. Some of them may leave the market, while others will feel the pressure to sell their current holdings.