What If Bitcoin Drops to 8.5K? Crypto Markets Our first question, which weve already touched on, is the fact that Bitcoin has been falling. It fell below 10K just today, and some people online have said that Bitcoins price falling has been connected to Donald Trump tweeting negative things about Bitcoin. But other people say that Trump tweeting about bitcoin, negative or positive, is just in general a great thing, because it brings more attention, brings bitcoin just into the zeitgeist more so to say.
So what do you think about that? Yeah, Im definitely in the second camp. My initial reaction was: this tweet is extremely bullish. If Donald Trump loves Bitcoin or hates Bitcoin, the fact that hes mentioning it, basically highlighting the advantages of bitcoin to the entire world.
So I thought that tweet was extremely bullish, and within the first half hour of the tweet, Bitcoin did rise about 2, not a lot for bitcoin, but if youre talking about initial reactions I think that was pretty clear. And, of course, that tweet came out on Friday. And then we had some mainstream media this morning trying to attribute the fall today from the tweet last Friday. Now this is a market that generates most of the volumes over the weekend.
So its very difficult for me to imagine that tweet actually was responsible for Bitcoin falling. Even though I dont think that this is what happened, but if we want to look at how timing works, the Fed was talking right over here and that actually just after that last week we saw the price of Bitcoin falling. All of this is like really smoke and mirrors though, a lot of people like to attribute price action to a news event.
And a lot of us make our living that way, so who can blame them. But if you zoom out a little bit youll see that none of this really has had any real noticeable impact on the price of bitcoin. Heres the monster rally that weve been seeing since midFebruary. We hit a peak late in June, a pullback, and now were in a range, the range is approximately from 10K to 14K, the high of 13, 800, if we pass that on the upside we have a strong break out. No doubt well see a lot more FOMO, people buying in.
Thatll pave the way for much higher levels, even a test of the alltime high of 20, 000. On the bottom side things are not as clear. Yes, we have that psychological support line of 10K. But as you mentioned it has been broken a little bit, so its not a strong support line at this point, but we can see that 9K, the exact psychological support. And many different chartists will draw their lines a bit differently.
You could probably name about a dozen support lines below that, but if we do look, lets say, just make a rising trend line from that surge on April 2nd, I believe the surge on April 2nd was really when things started kicking off for this market. You can see this kind of pattern holding here. This is not like strong support resistance line, but rather just looking at the trend overall. And we can see that weve been above this line, below this line, but overall, even if we come down to 9K or even at 8, 500 I would say this this trend line still holds weight were in an upward trend overall.
So try not to confuse shortterm price movements with longterm trends. So, my next question has to do with altcoins, because they seem to be having even heavier losses than Bitcoin. For example, Ethereum lost around 17 of its value in 24 hours.
So, why do you think that altcoins are having much more significant losses than bitcoin right now? Thats an excellent question and it does kind of fit in with what weve been seeing lately, its quite consistent that Bitcoin is the leader of this rally. So ever since April, second surge Bitcoin has been firmly in the drivers seat. And the reason for this is that mostly people are gravitating towards Bitcoin.
Bitcoin is basically consolidating the entire crypto market, weve seen Bitcoins dominance rising. Thats because most of the excitement throughout this rally has been specifically surrounding Bitcoin. So some of the altcoins on the way up, so when were in that kind of dynamic, where bitcoin is dominant and were in a bull market, I dont know if we can call it a bull market just yet, but lets say we are in a bull run at the moment. So when the prices are moving up, bitcoin is going to tend to outperform.
And then when we see the pullbacks then well see that the altcoins are gonna get hit a lot more than bitcoin would as traders gravitate towards safety. Im moving on to just the general market again. In a recent interview with Bloomberg, CZ of Binance said that hes been seeing about 60 of the trading volume on Binance coming from retail investors which is the same as last year, as opposed to institutional investors.
So can this be considered a sign that the space lacks maturity do you think? Well, I think its still early. I mean weve been talking about these retail investors coming into the market, its pretty much since the fall in the beginning of 2018. I mean this has been kind of a market theme. However, and as weve stated in the last few articles that weve done, even though this entire rally has been driven largely on the speculation that institutional players are about to enter, actually the institutional players dont have any major gateways open at the moment.
All of the institutional players that weve talked about, mainly backed in Fidelity, the Nasdaq and so on. They havent actually opened their doors yet. I mean theyre still on the verge, right. Fidelity is just testing their first few clients, Bakkt said that theyre going to start testing very shortly.
However, if somebody on Wall Street wants to buy bitcoin at the moment, the only real option they have is the futures contracts on the CME. So, those futures contracts as we know are cash settled. So theres no actual Bitcoin involved in those transactions.
So at the moment there isnt really any option for those institutional players to buy bitcoin. However, those options are very likely to be opened up within the next few days even. So CZs comments theyre apropos everything that weve been seeing, all of this rally has been driven largely by retail investors, specifically retail investors who are already familiar with the crypto market, who are getting excited that the institutional players are finally entering. Now, this could be a situation of buy the rumor and sell the news, right, the institutional players finally get here and then theyre you know on the sell side instead of on the buy side, its happened before. However, what we do know is that once those gateways are open, those bridges are built, it brings more liquidity into the market and much larger cash flows.
And, generally speaking, overtime those cash flows are more likely to have a positive impact on the price especially on the level that were talking about here. All right. So my last question now goes back to a specific cryptocurrency Litecoin, because that halving is going to be taking place in August, which is going to really reduce the block awards by 50. So, what do you think is going to happen to the token after this event? Thats an excellent question.
I know that Litecoin is probably one of the strongest cryptos out there. I mean its the first fork off of Bitcoin. It has an incredibly strong community.
I think that its going to really depend, weve seen a lot of speculation based on this halving event a lot of the time we know that halving events have a tendency to be priced in before they actually occur and even throughout this rally I mean on February 11th, right, we can see that pop was a lot bigger than bitcoins, litecoin was really arguably one of the leaders in this entire rally that were seeing now. However, we do see a massive pullback so far. And I think that, you know, thats in line with what weve been seeing through the rest of the markets. So, look, Litecoin has, even though it has a very strong community it has a very strong test in front of it. And thats going to be about adoption.
So the more we see, you know, merchants accepting litecoin and people paying with Litecoin that will cause the price to rise long term, everything else is going to be speculation. If you guys want to participate in the bitcoin revolution, check out our merch store in the link below. Right now were having a 30 discount for all Cointelegraph YouTube subscribers.