Cryptocurrency Markets Make a New 2018 Low Below $200 Billion

Andrew Cummings
August 17, 2018

Through a choppy afternoon, Bitcoin broke through to $6,400 levels, with an intraday high $6,499 seeing Bitcoin test the day's first major resistance level at $6,489.63 before pulling back to $6,300 levels. The total market capitalisation of virtual currencies dropped to US$192 billion from a peak of about US$835 billion in January, erasing much of the gains seen during the speculative mania at the end of 2017.

This means that over 50% of the entire cryptocurrency market is made up of Bitcoin.

Bitcoin's market dominance has spiked during the recent bear market and now represents 56% of the AltDex 100 Index (ALT100), a benchmark index for large-cap cryptocurrencies and tokens. "I think bitcoin dominance is actually showing the market is reacting to what's been taking place". In addition to Bitcoin's price falling, the overall cryptocurrency markets fell from daily highs of $257 billion to daily lows of $236 billion.

Bitcoin has lost almost 7% in the last 24-hours as the world's largest digital currency dipped below $6000 mark, momentarily, before finally recovering back. As of this writing, the currency has recovered a bit to around $6,044.

The surge in Bitcoin dominance during this bear market can be viewed in many ways.

Bitcoin and dozens of smaller digital tokens tumbled. It is clear that many cryptocurrency investors view Bitcoin as the sole cryptocurrency with adequately proven utility and endurance, as Bitcoin has been through many crashes since its birth in 2009.

Lee and Novogratz believe that the dominance will continue to rise as the market reacts to the recent good news.

All these have helped convince investors that Bitcoin is the best amongst them all.

Some analysts, including CNBC's Fast Money contributor Brian Kelly, suggested that the quick recovery of the crypto market recorded on August 16 was caused by the closure of the US Bitcoin futures market, creating a short squeeze.

Given the unpredictable movement of Bitcoin prices over the last several months, it is hard to ignore the chances of price manipulation. Over the last 60 days or so, Bitcoin has really been the leader - a lot of that had to do with the speculation about an ETF.

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