Bitcoin took another nose dive below $4,000. Bitcoin lost 11% dropping to $3,574. And not surprisingly, Bitcoin isn’t alone to take a dip. Ethereum, Litecoin, and XRP also saw red today. Timothy Tam who is the co-founder and CEO of CoinFi, which is a cryptocurrency research company in Hong Kong observed the transfer of around 40,000 Ether to an exchange an hour before the price dipped.
In addition to this, Ethereum classic which is another version of Ethereum fell victim to a 51% attack. It is said that around $1.1 million were spent twice.
He said that “Usually, transfer of Ethereum onto an exchange indicates an intent to sell, and if there is a sell-off on one exchange it compounds like dominoes to another because arbitrages will sell immediately on the other exchanges as well”.
Reversal from the Surge Last Sunday?
According to Mati Greenspan of eToro, the price movement is a reversal of the surge that happened during the weekend. He said that “At this point, the gains made since the start of the year have now been reversed back to a neutral 2019”. Greenspan mentioned on Twitter that the support is at $3,550.
Waiting for Institutional Adoption
It seems that many crypto observers are still waiting for adoption to take place. They are still waiting for institutional investors to commit to the market. The good news is that ICE which is the parent company of the New York Stock Exchange, as well as Nasdaq, are both planning to launch Bitcoin futures this year. You also have the launch of Bakkt in the coming months as well as the possibility of a Bitcoin ETF.
Is there a chance that Bitcoin is going to recover? Jeffrey Gundlach who is the CEO of DoubleLine management thinks that Bitcoin could hit $5,000 soon. Gundlach is a notable critic of the cryptocurrency and is a manager of assets worth $200 billion.
He said that “I don’t recommend anything with Bitcoin, really…but if you really want to speculate, I think it could make it to $5,000. Talk about an easy 25%”. And it seems that he is actually correct about his forecast. It matches well with what Mati Greenspan was thinking.
Earlier this week, Greenspan mentioned that “If we zoom out…we can see that the overall range that we’re in is from $3,000 to $5,000 per coin…So we’re now at the halfway mark in the middle of the broader range”.
Can Cryptos Recover?
Can cryptos actually recover this year? Will there be institutional investors? There are those saying that Bakkt doesn’t guarantee another bull run. Also, the US Securities and Exchange Commission is still not sure about a Bitcoin ETF.
Pro-crypto SEC commissioner Hester Pierce even mentioned that there is a chance that a Bitcoin ETF will not get approved soon. As for SEC Chairman Jay Clayton, he thinks that the crypto market still needs to do a number of changes before the agency feels comfortable about approving a Bitcoin ETF. According to him, exchanges lack the surveillance tools to trace possible price manipulation.