Negative News in One Large Crypto Affects the Entire Market, As Evidenced by Ethereum DropJuly 18, 2018
In the first part of the year 2018, Bitcoin demonstrated its volatility. But when the second half of the year comes in, the market observed an exact opposite to its nature. That left the crypto community wondering what will be rest of 2018 has in store for everyone else.
In the past week, Bitcoin bounced a few with 0.03% increase to its $6298.86 price. This was due to FUD’s hacking of Binance along with the great news associated with Coinbase Custody announcement. This was great news because it means an easier route for the institutional capital to come into the market.
At the same time, the announcement brings to the market more legitimacy. This also brings an increased demand to the market, which helps in boosting the prices. However, right after the announcement was an unfortunate event due to FUD reporting channels about a hack on Binance.
It’s true there was an unethical trading strategy happening with the SYS token. However, no hack actually happened and the funds were Secure Asset Funds for Users (SAFU). Binance was not at fault and handled the situation as well as could be expected.
Thus, it came out of the reports by FUD relatively unscathed. But still, it had made a huge impact in the industry that whenever there is news about a hack, the price of Bitcoin plummets together with public sentiment.
That was last week and this week, the cryptocurrency market faced another loss in $22 billion across all cryptocurrencies. Similarly, Bitcoin dropped below the $6400 range. When this happens, there is usually corrective rally charging through the week.
This week, however, was not the case. The crypto market has yet to show any positive momentum that could possibly lead to a corrective rally. Besides Bitcoin, Ethereum also showed a significantly huge drop. The coins drop even more than 5% of its value compared to a US dollar.
Usually, the drop in small and large hard caps follows the present trend of Bitcoin. However, it may not be the case with Ethereum’s drop this week. Other issues may have affected the drop such as the Bancor scandal.
Although the negative news was more related to Ethereum than Bitcoin, it is a fact that many in the crypto community look at the market as one. As such, when even one of the largest crypto had negative news, the whole industry is affected.