As a dramatic year begins to wind down to a nervous close, the digital asset bear market continues to dig its claws into the majority of cryptocurrencies.
Bitcoin is now 50% down from its $14,000 high in June, while a number of top altcoins have lost more than 70% of their value.
The entire cryptocurrency market cap is now sitting just below $200 billion, which is a staggering $170 billion less than it was six months ago.
The hype surrounding Facebook’s proposed launch of Libra has now subsided amid mounting regulatory scrutiny, while the launch of physically-settled Bitcoin futures on Bakkt has also failed to impress.
From a technical perspective, Bitcoin has endured consistent lower highs following the $14,000 top in June, with an exponential moving average death cross also coming to fruition on the daily chart.
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The chart is eerily reminiscent to that of 2017, when Bitcoin slumped heavily as hype-fuelled retail investors began to exit the market.
The next logical stopping point for Bitcoin is the $5,900 level of support, which would see its market cap drop to around $106 billion from $132 billion.
However, the reality is that a bear market, as seen in 2017, lasts much longer than investors want to believe.
If $5,900 fails to hold, Bitcoin could well fall to where it was in December 2018 at around $3,150.
Much of Bitcoin’s short-term future depends on major news events coming out of China and Facebook over the coming months.
China’s apparent warm approach to blockchain could potentially cause a global impact, while Libra’s launch could drive mainstream adoption of digital assets.
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Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.