While the cryptocurrency market has been enjoying some noticeable success over the past few months, with Bitcoin particularly seeing some impressive bullish returns. The stage looks unfortunately set for cryptocurrencies to test their lower supports once again.
Two of the more prominent examples we are seeing now is Bitcoin, which is testing closer towards its lower support of $9,000, with the prospect of going even further, especially as some exchanges have it trending below this. The second one being Ethereum; which moved from highs of $200 to hit trough positions of $90 or below.
In total, the crypto market has seen more than $10 billion wiped off its market value within the span of 30 minutes. So, with this kind of reversal in the crosshairs for cryptocurrencies across the spectrum, what accounts for this sudden reversal?
One argument could very well be down to a broader-spread bearish run on international stock markets. Over the final weeks of August, for example, the FTSE 100 fell over 400 points from 7,580, Dow Jones fell by 1,000 points from over 27,000, while the NASDAQ shed 400 points from 8,200.
Two factors that certainly do little to help are the reports of a recent attack by a Bot-net originating from Latin America - which managed to inject a crypto-jacking system onto more than 850,000 servers before being removed by France's 'Cyber Gendarmes.'
Along with this, we've seen announcements from the UK of a proroguing of Parliament, while the United States has announced a continuation of tariffs and policies against China. Could the drop in Bitcoin and cryptocurrencies, in general, be correlated with this downward turn in the market as a whole?
While they're undergoing some negative slips for the moment. There's more good news out there than bad over the course of this month. For example, recent announcements have shown an increasing number of countries and educational institutions are looking to embrace blockchain and cryptocurrencies.
Coinbase recently reported on the rising number of higher education institutions which offer some kind of degree oriented around the technology. Meanwhile, the People's Bank of China has announced a delay to its own state-backed cryptocurrency. And while this sounds like some bad news, it's yet another country out there that's eager to dive into digital assets.
According to Nigel Green, the CEO of the financial advisory company, the deVere Group, Bitcoin is not going to stay below the $9,000 if/when it hits that support.
"Looking at its performance this year, I believe that the new normal bottom price for bitcoin is $10,000," he told The Independent.
"It bounces at this price. If it fluctuates below this level, it shoots back up again. We have seen this in action on Monday when bitcoin hit $10,500 in a matter of minutes."