Market Wrap: Bitcoin Tanks to $10.4K; ETH Market Dominance at 2020 High

Bitcoin continues to slide while ether has a larger share of the crypto market than it has had in years.

Bitcoin continues its downward trend Thursday, with prices descending as low as $10,468 on spot exchanges such as Coinbase. While it has recovered a bit, traders selling for profits has certainly been the theme right now. 

Read More: Bitcoin Plunges $403 in 1 Hour to Lowest in a Month

“This is similar to what we’ve seen as bitcoin approached the $10,000 and $11,000 levels, where profit-taking occurred on a few different occasions,” said John Kramer, a trader at crypto over-the-counter firm GSR. “Many investors will see this as an opportunity to buy the dip.”

Just like Wednesday, leveraged liquidations played a role in exacerbating bitcoin’s price drop. However, Thursday’s wipeout of long traders on derivatives exchange BitMEX was a bit higher, with $10 million in hourly liquidations topping Wednesday’s $9 million hourly spree, the equivalent of a margin call in crypto parlance. 

Read More: Bitcoin Risks Deeper Price Pullback as Exchange Inflows Spike

“Some people who were buying in over $11,500 in BTC with leverage suddenly got stopped out when we moved back down towards $11,100,” said Chris Thomas, head of digital assets for Swissquote Bank. 

Thomas suspects bitcoin’s price will not reach new 2020 highs in the near term, despite testing that level as recently as Tuesday when the price hit $12,085. “I think we trade in the $11,000-$12,000 range for a while,” he said. 

In equities, while the major Asian Nikkei 225 index was buoyed by expectations new leadership in Japan will continue economic stimulus policies put in place by outgoing Prime Minister Shinzo Abe, stocks in Europe and particularly in the U.S. are awash in red – as it is in most of the crypto ecosystem Thursday.

GSR’s Kramer views the equities markets with some trepidation, and has concerns about the performance of traditional finance for the balance of 2020. “Stock valuations remain overinflated in the eyes of many observers, and economic uncertainty persists,” he said. “A crypto drop like this won’t deter the majority of investors who have a longer-term investment thesis.”

Read More: Jump Trading Invests in Decentralized Exchange Serum

The second-largest cryptocurrency by market capitalization, ether (ETH), was down Thursday, trading around $402 and slipping 7.6% in 24 hours as of 20:00 UTC (4:00 p.m. ET). 

Read More: DeFi Risk Management Startup Cozy Finance Debuts With $2M Funding 

But while the price is down, ether’s dominance of the broader crypto market hit a 2020 high of over 14% Wednesday. Although dipping a bit Thursday, the last time ether’s share was at these levels was back in August 2018. 

“A large number of useful projects on the Ethereum blockchain contribute to ether dominance growth,” said Azamat Malaev, co-founder of HodlTree, a decentralized lending protocol. However, scaling is an issue that could cause ether’s share to wane, Malaev added. “To maintain this trend, Ethereum urgently need to scale the network. For ordinary users, transactions are already very expensive”

Read More: Ethereum Developers Focus on Congestion as Fees Spike Over 600%

Digital assets on the CoinDesk 20 are mostly in the red Thursday. Notable winners as of 20:00 UTC (4:00 p.m. ET):

Read More: New Crypto Derivatives Let You Bet on (or Against) Tether’s Solvency

Notable losers as of 20:00 UTC (4:00 p.m. ET):

Read More: Hardware Wallet Flaw Lets Attackers Hold Crypto for Ransom

Read More: Around the Crypto World in 15 Charts

Read More: Digital Bank Revolut Expands Crypto Buying and Selling Service to Australia