Bitcoin dropped to $6,445, shaving 10% off its value in the morning session as Goldman Sachs reported decision to put on hold a crypto trading desk weighs on markets. And again, sharp downswings by bitcoin are taking altcoins markedly lower across the board.
Although there is no named source for the Goldman Sachs news and the company itself only released a boilerplate statement about “responding to customer demand”, the lack of developments in the area is perhaps evidence enough. Goldman didn’t actually say it was not opening a trading desk but instead it hadn’t reached a “conclusion” on their “digital asset offering”.
Altcoin extinction event
Worries about a so called altcoin extinction event are again forced into the agenda.
Most tip altcoins are down around 20% – ETH, Bitcoin Cash, EOS, Litecoin, Cardano, Monero, Iota and Dash to name a few. The verbal market capitalisation stands at $203 billion, a fall of $37 billion from recent highs seen just this week at $240 billion. Bitcoindark, following some unexplained giant gains, is off 23% at $51.29 and Bitcoin Diamond, another clone seeing recent big jumps, is 32% lower at $2.47.
Bear trap turns bull trap?
It looks like the bear trap was a bull trap, although a trading pattern with strong support at $6,000 suggests a bounce soon, however a repeat of a visit to the 5,000s is an equally likely scenario.
Either way, bulls will interpret the present decline to a necessary part of the process of putting in a bottom on the bear market.
The charts don’t lie and the price action of the past two days confirms that the downtrend is still in place.
Theories about institutions pushing down prices are far-fetched if attractively soothing for battered portfolios. But it doesn’t add up, not because we haven’t seen compelling evidence. For institutions to pressure prices they would have to market participants, which they are, largely, not.
Certainly someone at Goldman may have got wind of the news and put in a short order.
A bank spokesperson commenting on the story, first reported in Business Insider, told CNBC: “In response to client interest in various digital products, we are exploring how best to serve them in the space. At this point, we have not reached a conclusion on the scope of our digital asset offering.”
Crypto drops, whales to blame?
Then there’s the Silk Road/Mt.Gox whale wallet to throw into the mix. Researchers monitoring have seen no movements that might explain the downturn.
Fears that progress made on low volumes was always likely to be fragile have proven correct for now. As it happens 24-hour volumes are at a high for recent times of $6.6 billion.
Worst performer in top 100 crypto (24-hr percentage change), 6 September, 09.45 UTC
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