Markets Weekly is a weekly column analyzing price movements in the global blockchain token markets. This edition looks at the week from 14th through 20th January.
After a wild start to 2017, bitcoin took it slow this week.
This relative calm was punctuated by a handful of sharp fluctuations, which saw the digital currency’s price fall to as little as $810 on 15th January and rise to as much as $914 on 18th January, data reveals.
But, despite the calm, there was uncertainty under the surface.
According to analysts, the market is still reluctant to make big moves in the wake of continued news from China that has found its central bank more actively engaging with local exchanges.
Trader reluctance
For now, this is keeping traders on the sidelines.
Ryan Rabaglia, head trader and digital asset specialist at Octagon Strategy, described the situation as one where ‘wait and see’ is still the attitude.
“Although the last round of news out of the mainland has seemingly been fully digested, we’re still seeing most traders sitting on the sidelines,” he told CoinDesk, adding:
“The fear of any rumor or news has spooked most.”
This state of mind contrasts, however, with market performance.
Bitcoin prices surged close to 10% on 17th January, climbing to as much as $908.13, but overall, markets have struggled to move above that mark.
The digital currency proceeded to fluctuate below $900 for most of the week’s remainder, trading at $894 at the time of reporting.
Investigation unfinished
While the PBoC investigation started out with central bank officials meeting with representatives of OKCoin, Huobi and BTCC, the first two of these major Chinese exchanges have now ceased margin trading.
This means the big question for now is, how will the lack of margin impact liquidity at what are effectively the world’s largest exchanges.
In this context, bitcoin prices will likely trade within a range between $850 and $950 for some time, according to Arthur Hayes, co-founder and CEO of leveraged bitcoin exchange BitMEX.
“The market also needs to absorb the unwind of the Chinese margin books,” he told CoinDesk.
Hayes is certainly not the only one optimistic about bitcoin markets moving forward, as other analysts – and market data – appear bullish.
Market sentiment has pushed higher over the last several days, as data provided by leveraged bitcoin trading platform Whaleclub shows the market was 91% and 93% long on 19th and 20th January, respectively.
Petar Zivkovski, COO of Whaleclub, noted the currency’s price recovery in recent week as a positive sign, but emphasized that the markets are cautious.
China’s importance
Compounding matters is that China is still the effective center of bitcoin trading activity.
Though data sources peg the market share of its exchanges at 95%, recent market assessments beg this closer to 85%. Either way, both data points are indicative of what’s at stake.
According to analyst Jacob Eliosoff, the ongoing developments surrounding the nation’s central bank could make China even more important than usual in the days and weeks ahead.
He concluded:
“The market will probably continue to be hypersensitive to the latest whispers on that front.”
Binoculars image via Shutterstock
TheBitcoinNews.com – Bitcoin News source since June 2011 –
Virtual currency is not legal tender, is not backed by the government, and accounts and value balances are not subject to consumer protections. TheBitcoinNews.com holds several Cryptocurrencies, and this information does NOT constitute investment advice or an offer to invest.
Everything on this website can be seen as Advertisment and most comes from Press Releases, TheBitcoinNews.com is is not responsible for any of the content of or from external sites and feeds. Sponsored posts are always flagged as this, guest posts, guest articles and PRs are most time but NOT always flagged as this. Expert opinions and Price predictions are not supported by us and comes up from 3th part websites.
Advertise with us : Advertise
Our Social Networks: Facebook Instagram Pinterest Reddit Telegram Twitter Youtube
