After a week of massive volatility and slump, cryptocurrencies have edged up across the board early Monday morning (AEST) in thin volume trading, taking a breather from a sell-off that took the entire market to multi-month lows last week, as digital coins came under pressure after recent gains. A similar surge in the past days was sold off sharply and eventually bulls lost the strength to push high.
As of press time, Bitcoin (BTC) is changing virtual hands at US $34,500, Ether (ETH) at US $1,981, ripple (XRP) at US $0.64, Binance Coin (BNB) US $289, cardano (ADA) at US $1.32, Dogecoin (DOGE) at US $0.26, ChainLink (Link) at US $18, UniSwap (UNI) at US $17, Polkadot (DOT) at US $15 and Stellar (XML) at US $0.25.
The UK’s Financial Conduct Authority, a regulatory body in the United Kingdom, has announced it banned Binance from offering certain services in the country.
“No other entity in the Binance Group holds any form of UK authorisation, registration or licence to conduct regulated activity in the UK,” the statement continued.
Other countries, including Australia, New Zealand and Canada may soon follow the suit as many crypto exchanges offer leveraged trading and other regulated activities to inexperienced users.
Bitcoin’s recent dive to US $29,000 isn’t close to being the worst in the digital currency’s 12-year history, although it was a breach of psychologically significant well-established support level.
It has roughly halved from a peak near US $65,000 in April, hurt by a cryptocurrency crackdown in China, looming regulatory scrutiny around the world and environmental concerns and whether any of the cryptocurrencies can actually become a currency to stay.
In the bigger picture, at the moment the entire crypto market’s downtrend from early May remains firmly entrenched and intact despite ups and downs on the way.
Therefore, the current rebound still needs to find fundamental support to push higher not to be considered a dead cat bounce – a temporary, short-lived recovery of asset prices amid an intact downtrend and does not indicate a reversal of the overall declining trend.
Light or thin volume can be used by traders, even large institutional entities for a tactical trading strategy to influence market direction and make profit in the short-term volatility. The strategy is to trade huge volumes in an illiquid or subdued market to move the market in the desired direction, which is usually assisted by other traders in euphoria who think the market is recovering.
Further short-term recovery is still likely as many technicians, as well as old-school fundamental investors prefer to hunt bargains and value in a falling market after signs of panic, or capitulation by the bulls.
However, investors and traders are growing increasingly nervous amid souring mood and negative outlook that may open up a long-lasting downward spiral, adding to the challenges facing digital asset holders in the market that has lost almost half of its capitalisation in the past week.