Bitcoin Recovers from another Slump, but it’s not over yet!

Investors are getting a taste of life exposed to a particularly volatile asset class that is in its infancy from a market evolution perspective and, while there is just a handful that is tainting the cryptomarket, it only takes a few to bring down the house and that’s what has been happening this week.

In stark contrast to the build-up of regulatory chatter in South Korea in previous weeks, last week was all about the theft of NEM coins and this week, which started off relatively quietly has delivered yet more negative news to the cryptomarket.

With the SEC freezing assets from on ICO and issuing subpoenas to two other entities, it’s been a frenetic first half of the week.

The cryptocurrencies have paid and Bitcoin has not gone unharmed.

Following Monday’s 5% slide, Bitcoin slumped 13.11% on Tuesday, to end the day at $9,698.98, which was a significant event, with Bitcoin last ending the day at sub-$10,000 at the beginning of December, whilst having touched sub-$10,000 intraday on a number of occasions.

A lack of support ahead of the close was reflective of the negative sentiment towards the market, though things could have been far worse when considering all of the negative chatter that has been hitting the markets of late.

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The general consensus seems to be that the actions of the SEC will likely be a common occurrence in the short to medium-term and that the shutting down of fraudulent exchanges and ICOs is a positive step by the regulators.

In the case of the U.S, the SEC has yet to impose draconian regulations that would likely lead to a more material sell-off, with the U.S regulator merely protecting the rights of investors and ensuring that business is conducted appropriately. To be honest, the sooner this happens across all the cryptomarket jurisdictions the better, as it would eliminate one significant source of unpredictable negative news.

A shift in sentiment through the morning has been evident today, with Bitcoin recovering from an intraday low $9,514.96 to $10,078.29 at the time of writing, an intraday gain of 1.08% and more importantly, pulling away from the possibility of fall through to sub-$9,000 levels.

Money has certainly left the table, however, with Bitcoin’s market cap falling back to $167.43bn. In contrast, Ethereum has managed to hold above $100bn, sitting at $103.91bn at the time of writing, with the gap between the pair narrowing significantly.

For Bitcoin, that’s quite a fall from its 7^th January $297.33bn high, when considering the fact that Ethereum’s decline from a 13^th January high $137.49bn is far less significant.

As Bitcoin’s dominance continues to fall, currently at 33.7%, it’s not going to be long before Bitcoin is knocked off the top spot. Once that happens, it may well be just a matter of time before Bitcoin Cash takes over. After all, it’s the number one ranking that is in Bitcoin’s favor, leaving Bitcoin Cash in the shadows.

With the Cboe’s February futures contract sitting at $10,030, down $85 for the day, Bitcoin is unlikely to go far, with touching $11,000 the best that investors can expect in the current market environment, while any fall back towards today’s intraday low will likely bring sub-$9,000 support levels into play.

There’s never a dull moment in the cryptomarket and, in spite of the volatility, investors are still eager to run the gauntlet…

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