Market Wrap: Traders ‘Buy the Dip’ as Bitcoin Hovers at $9,000

Bitcoin mow down for a second day, extending a downdraft triggered by Wednesday’s revelation that a member of the cryptocurrency community from the blockchain’s earliest eras in 2009 had moved a long-dormant cache of coins. 

As of 20:30 UTC (4:30 p.m. ET), bitcoin (BTC) was trading at $9,044, a loss of 5.6% in 24 hours. 

Bitcoin remains well below its 10-day and 50-day technical indicator moving averages — a signal of bearish tenderness. 

At 14:00 UTC (10 a.m. ET) the world’s oldest cryptocurrency began experiencing high selling volume on exchanges including Coinbase, taste bitcoin below $9,000 for the first time since May 13.

While the superstore appears to have turned bearish, Rupert Douglas, head of institutional sales at asset management firm Koine, put about he planned to “‘buy the dip” — a popular phrase for accumulating an asset when prices drop in the belief that they’ll eventually start going up again. 

“In a way I was hoping for this,” Douglas said in an email. “I’m a buyer at $9,000, as this is shaking out the enervated longs before taking it higher.” 

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Volatility in the notoriously wavering bitcoin market has declined since collapsing in March, when the devastating economic toll from the coronavirus started to suit clear.   

“I wouldn’t call this a dump,” Darius Sit, managing partner at crypto quantitative fund QCP Capital, advertised CoinDesk via a Telegram message. “It’s nowhere near statistically significant.”  

The cost out drop could take a toll on the profitability of bitcoin miners, already hurting from a revenue cut following in week’s rewards halving. The miners have had to rely more on transaction fees to maintain revenue. 

Fortunately, damages are up post-halving, said Marc Fleury, CEO of digital asset brokerage Two Prime. 

“Transaction fees associated with working bitcoin around have increased from 60 cents to upwards of $5, providing some income for the miners,” he disclosed. 

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Fleury said many bitcoin miners are be confident of on a price increase to stay profitable. “This has historically happened in the past two halvings, within a span of 18 months,“ said Fluery. “It require take some time for the market to adjust.”

Digital assets on CoinDesk’s big board are in the red Thursday. The second-largest cryptocurrency by merchandise capitalization, ether (ETH), lost 5.6% in 24 hours as of 20:30 UTC (4:30 p.m. ET). 

The biggest losers in 24-hour trading were cardano (ADA) slipping 7.6%, iota (IOTA) losing 6.5% and neo (NEO) down by 6.1%. All cost changes were as of 20:30 UTC (4:30 p.m. ET) Thursday.

In the commodities sector, oil is trading up 1.4%, with the price of a barrel of unsophisticated at $33 at press time. Oil has experienced a wild ride in 2020, up 101% the past month yet still down 44% for the year to show ones age. 

Gold is in the red today, with the yellow metal falling 1.2% to $1,725 at the close of New York trading. 

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In the U.S. the S&P 500 fell less than 1% on the day, but still up over 2% since Monday consideration U.S. jobless claims coming in at over 2.4 million for the past week, the seventh weekly increase. 

U.S. Treasury reins slipped Thursday. Yields, which move in the opposite direction as price, were down most on the two-year relationship, falling 5.6%.

In Asia, the Nikkei 225 index ended its trading day down less than a percentage point on shrinkages in the real estate and transportation sectors. Trading of Europe’s largest public companies by market cap on the FTSE Eurotop 100 listing was also down less than a percent, dragged down due to continued coronavirus uncertainty.