Bitcoin price has again plunged due to regulations globally

Ethereum is showing bullish signals as Bitcoin is plunging
  • Regulations globally have again affected the price performance of Bitcoin
  • Although the price of the leading cryptocurrency has plunged, its average daily trading volume is observed soaring
  • Plunge in BTC price also impacted the price of Ethereum
  • Observing Ether’s trade volume beating BTC, investors have hope in the cryptocurrency
  • Following the uncertain scenario, traders are using range-bound trading

Regulations are a significant concern for the crypto industry. In mid-May, Bitcoin, the leading crypto asset, was observed facing sharp dips. The prominent reason behind the downtrend was the Chinese regulatory concerns, which prohibited crypto-related firms in the country. However, after the last market crash, little positive news was heard, which was steadily helping Bitcoin gain its momentum.

In recent developments, we observed that again investors of Bitcoin are getting bearish on the coin. Notably, where BTC is losing its value, Ethereum is showing few bullish signals.

Bitcoin was observed tumbling this week

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Bitcoin is the leading crypto asset in terms of market capitalization, as per CoinMarketCap. Still, the asset is showing bearish signals in the current scenario. Following the price chart of the digital asset, we observed that over the last seven days, it is down by more than 6% currently. Notably, on Tuesday, the coin faced a sharp fall of more than 12%, but it is gaining its value back since then.

Source: CoinMarketCap

Regulations are the reason behind price turbulence

Bitcoin has performed tremendously amid the global COVID-19 pandemic. With mainstream adoption and attention, the flagship cru[to the asset has also attracted several governments globally.

Following the adoption pace of the leading digital asset, several governments are seeking strict regulations. Countries like China and India have prohibited banks from offering services to crypto-related firms. Simultaneously, China, the country that dominates the crypto market by 30% to 35%, also banned all the crypto-firms in the country.

Read More: The Chinese province of Qinghai ordered the shutdown of all crypto miners

Read More: American Investor Robert Kiyosaki Calls the Bitcoin Crash a Great News

According to few observers in the cryptosphere, continued concerns regarding regulations are currently turning investors bearish. Along with the Chinese regulatory regime, the possibility of tighter monetary policy from the United States Federal Reserve also concerns such investors.

Price fall and trade volume rise

On Tuesday, when the price of Bitcoin lost an excellent level of its price, we observed that the trading volumes in exchanges began to surge. At the time, the trading volume of the digital asset crossed $2.9 billion. However, since then, the daily average volume of the asset has surged to the benchmark level of $4.9 billion.

Source: Coindesk, CryptoCompare

According to Katie Stockton, technical analyst at Fairlead Strategies, Bitcoin has found its footing. The leading asset is becoming oversold from an intermediate-term perspective within its long-term uptrend. Additionally, observing BTC’s standing, Katie estimates that the emerging asset class will establish a lower high versus April without damaging the long-term uptrend.

Bitcoin also impacts Ethereum

Ethereum is currently the second-largest crypto asset in terms of market cap, as per CoinMarketCap. While the price of BTC dropped, it also impacted the price of other altcoins like Ethereum. When Bitcoin was down by more than 12%, Ethereum was observed sliding by more than 14%. However, after a fall, Ether has climbed a bit to date. Still, it is down by more than 12% over the past seven days.

Source: CoinMarketCap

According to Katie, the short-term momentum of the world’s second most popular crypto asset has improved with the rebound. However, the intermediate-term momentum has deteriorated, supporting a lower high than the May ATH near $4380.

Ether volume has continued to beat BTC

Ethereum has been continually surpassing Bitcoin in terms of daily volume traded. Observing Bitcoin’s higher level in terms of volume and Ethereum’s volume performance, analysts estimate that the surge in volume will remain for a longer timeframe.

According to Constantine Kogan, a crypto investor and founder of BullPerks, Ethereum’s upstart rise of this year as an institutional investor has just begun. Indeed, Kogan believes that Ether will grow more in the longer timeframe, as Proof-of-Stake is providing a more green and sustainable consensus mechanism.

Crypto traders are preparing for any possible scenario

In the Ethereum options market, it is observed that strikes below $2560 are favoring downtrends. Simultaneously, more than 64k Ether coins total open interest are at the surprisingly low $400 strike.

According to Two Prime’s Cox, the revenue fluctuation has frightened the traders. Although volatility levels all around have basically collapsed at this point, Bitcoin volume is trading back to the end of the range.

Read More: Elizabeth Warren sees hope in bitcoin, discusses its role in meeting

Read More: El Salvador’s Bill Accepted by the Congress, Bitcoin Now a Legal Tender

Following the scenario, Cox believes that range-bound trading will begin, as freshers are hesitant. On the other hand, holders are deciding whether it is the time to start accumulating. However, in the short term, ETH could continue to outperform. Observing the overall scenario, it seems like Ether is indicating some hope to its investors compared to Bitcoin.

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Ahtesham Anishttp://www.thecoinrepublic.com
Ahtesham Anis is a Computer Science undergrad student currently based out of India. Coming from the business background and his keen interest in Cryptocurrency and Blockchain technology is what Ahtesham brings to the table. He is always an eager learner when it comes to exploring the new technologies and topics in the crypto world.

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