Cryptocurrency traders are not pleased with the market’s performance on Tuesday, July 11th. All cryptocurrencies in the top 100 lost value, with one exception. Then again, PeerPlays is not a currency everyone has in their portfolio, and it only generated $1,257 in volume. The Bitcoin price is struggling a bit, but things can recover.
Bitcoin Price Dips But Altcoins Get Shredded
For the longest time, there has been an obvious correlation between the Bitcoin value and the value of other cryptocurrencies. Most of the alternative cryptocurrencies do not necessarily have a clear use case, nor are they directly competing with Bitcoin. There are some exceptions, but the top 10 is filled with different currencies all trying to do something else entirely. Even Litecoin is not competing with Bitcoin, but rather is a complementary currency.
Bitcoin price affects all other currencies. All of these coins are primarily traded against Bitcoin, so it is only normal their value is linked to the Bitcoin price itself. This goes for all of the alternative currencies, even which can also be traded against fiat currencies. A lot of people prefer to buy Bitcoin with fiat currency and use that BTC to diversify a portfolio since so few others are directly traded for fiat.
All of this blood in the water has caused the overall cryptocurrency market cap to shrink to just over $81bn. Earlier today, that number was sitting at around $79bn, indicating there may be a temporary reprieve from all of the damage. The cryptocurrency market is very volatile right now, and now is probably the worst time to make trading mistakes. The Bitcoin price is slowly climbing toward $2,400 again, which is good to see. Ethereum managed to crawl back to just over US$200 as well.
Perhaps the biggest loser in all of this panic is IOTA, with a 25.24% value decrease. This cryptocurrency entered the charts a few weeks ago and immediately catapulted itself to a $1.75bn market cap. That momentum could not be sustained for long, though, as less than a month later, the cap has shrunk to under $600m. Speculators are hopeful this creates new buying opportunities, but it remains to be seen who will put their money into such a volatile market right now. Ripple is also taking a massive beating, dropping 21.22% in value over the past 24 hours.
It is unclear as to what is driving this bearish trend. We have seen signs of bearish Bitcoin price momentum for nearly two weeks now, yet something finally gave way last night. Interestingly enough, Bitcoin is the currency with the fewest losses -in percentage- out of all top 30 currencies. That indicates a lot of people are liquidating alternative currencies and going back to Bitcoin as a safe haven store of value.
When Bitcoin’s price recovers, alternative currencies may flourish once again. A lot of people have panic sold as they want to keep losses to a minimum. However, not all of these people will invest in altcoins again. A lot of people will focus on Bitcoin first and foremost. It will remain the largest cryptocurrency by market cap for quite some time to come. Bitcoin may not be perfect, but there is no other currency, which comes even close to threatening the “king” right now.