The crypto market hasn’t recovered from Tuesday’s flash crash yet, with Bitcoin still trading under $46,000 and Ether below $3,400. The total cryptocurrency market cap is also currently below $2.2 trillion.
This drop-in crypto prices, so soon after the May crash from which the market only started to recover on July 21st, has the market sentiments turning back to “fear.”
The Crypt Fear and Greed Index is currently giving a reading of 31, down from 79 in late August but up from a reading of 10 in late June.
“Markets are kind and offer opportunity to new Investors through such corrections,” said Siddharth Menon, COO of Binance acquired Indian crypto exchange Wazir X. “Investors psychology is to buy the dip but very less percentage of investors actually buy the dip. Most of us wait for the bottom to buy and top to sell. In reality that is an impossible task. Staying Invested in markets has always been more rewarding than timing the market.”
Interestingly, despite the pullback and the healthy reset in the funding rate, which are currently the highest at 0.0209% on OKEx for Bitcoin perpetuals and on some exchanges, it has gone even negative, shorts are leading the futures market.
Judging by how bear feed was yesterday, think we break 50k sooner rather than later in pretty aggro fashion
While the market slowly moves upwards, the sell-off this week came at a time when Bitcoin made history by becoming the legal tender alongside the US dollar. While this big move initiated a sell-off in the market, it is expected to kickstart a momentum that will continue to other countries.
“In the coming years, many more nation-states will use crypto as part of their monetary policy, either as reserves in their central banks or using cryptocurrency rails for central bank settlements, or potentially just simply taking a cryptocurrency as El Salvador has done and make it the national currency,” said Cardano founder Charles Hoskinson in a YouTube video earlier this week.
According to him, the younger generation, those under the age of 25, the majority of whom have a positive view on cryptos and also own them, will trigger the mass adoption. “That’s the future,” he added.
Meanwhile, US regulators are amping up their efforts to regulate the sector as we saw Coinbase talking about receiving a Wells Notice from the SEC. It just might be the negative effect of SEC’s crypto policy that Ark has amended its prospectus of a Bitcoin ETF to include that the fund will invest in crypto ETFs in Canada.
Eric Balchunas, a Senior ETF Analyst for Bloomberg, estimates “they looking to swap out GBTC, which they own $350m worth for one of the Canadian ETFs, which tracks better.”
“SEC policy is causing capital flight from the US to Canada,” commented Jake Chervinksy, general counsel at Compound Finance, on ARK’s move.
Still, price-wise, FOMO is well and alive in the crypto market as mid and small-cap cryptos like ALGO, FTM, and NEAR, continue to rally, and the macro environment is also in favor with tapering not begun yet.
AnTy has been involved in the crypto space full-time for over two years now. Before her blockchain beginnings, she worked with the NGO, Doctor Without Borders as a fundraiser and since then exploring, reading, and creating for different industry segments.