Crypto Today: Bitcoin steadies above $12K, ether drops to weekly lows

Bitcoin price doubles in 5-weeks from 6K to above 12K.
Ether and bitcoin cash struggle to find demand.

Eren Sengezer FXStreet

Following yesterday's choppy trading action, the BTC/USD pair gained traction during the early trading hours of the Asian session and broke above the critical $12K mark. With the violation of that level, more buyers came into the market and led the pair to a fresh record high at $12800. The pair lost its bullish momentum amid profit taking in the NA session and was last seen trading at $12300, up $700, or 6% on the day. Although no clear catalysts were present behind the initial upsurge, investors seem to be eager to get their hands on bitcoin before big players like the CME Group and the CBOE enter the market in coming days.

In a recent article, Sal Guatieri, Senior Economist at BMO Capital Markets, argued, “an important test for bitcoin could come soon. The CME Group plans to open a bitcoin futures market by year-end, subject to regulatory approval from the Commodity Futures Trading Commission. This will give sceptics the ability to sell bitcoin short in hopes of buying it back at a lower price. In essence, bitcoin’s price could fall if there are more sceptics who believe it is a bubble (and are willing to put their money where their mouth is) than enthusiasts who think otherwise. It promises to be a thrilling ride, so hold onto your digital seats.”

On the other hand, ether and bitcoin cash, second and third largest digital currencies in terms of trading volume, came under pressure on Wednesday as the demand shifted to bitcoin. The ETH/USD and the BCH/USD pairs lost 7% and 2% respectively.

The total market capitalization of bitcoin increased to $230 billion on Wednesday, surpassing the tech-giant Intel's $205 billion. The total market cap of all digital currencies is now at an all-time high of $378 billion with bitcoin remaining the most dominant cryptocurrency with a 58% volume.

In the meantime, the Reserve Bank of India issued a press release on Tuesday, reminding the public of the potential financial and legal risks of dealing with virtual currencies.In yesterday's statement, the bank pointed to two separate articles that it published in 2013 and earlier this year. Nevertheless, the market reaction to the press releases was non-existent.

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

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