After snatching a stretch of 24 hours above USD 10,000, Bitcoin price dipped once more below that same level, if only for a brief moment, ending the week on a sour note.

When you want something so badly, it ends up being such a disappointment no matter the outcome. Bitcoin bulls should be happy that price on Saturday morning Europe time is somewhat still holding at the support level. But they will feel cheated since most of them were expecting yet another strong rally toward the tail end of September. Price is now on a thin margin at USD 10,020 (10:15 am UTC, CoinDesk).

Altcoin sentiment recovering?

Altcoins are now starting to also lose their grip on new gains made during the working week, with Ethereum sliding back down from USD 220. Our own technical analysis on BitcoinNews.com does foresee either USD 200 or USD 240 for Ethereum, so it’s still a fine line in between for now. As a result, the altcoin market may also decide to chuck caution to the wind and take the Ethereum ride if they wish to depeg from Bitcoin.

Along with that, Ethereum’s transaction fees are now reaching a high, not seen since March 2019. So much so, this has now made it costlier to transact than Bitcoin. In the past week, median and mean fees have reached about 32 gwei per unit of gas, which averages out to something like 15 cents for a transaction to confirm reasonably quickly.

According to digital assets data providers Messari and Coin Metrics, over a 24 hour period earlier this week, Ethereum users spent USD 207,000 on transactions compared to only USD 180,000 on Bitcoin. Many believe that this is because Tether migrated to Ethereum in July. The world’s most popular stablecoin had previously used the Omni protocol, which was built atop of the Bitcoin blockchain.

The Coin Metrics report stated:

“[Tether]… accounted for over 25% of all Ethereum transactions on September 8th, and has consistently accounted for more than 10% of all Ethereum transactions since mid-August.”

Although altcoin prices are now a very low 5% to 10% of their all-time highs, coinciding roughly with Bitcoin’s meteoric rise in late 2017, many of them have been seeing a recovery this year, largely thanks to sentiment improving on crypto and Bitcoin in general. Nevertheless, if price alone was not enough to mark an uptick in positivity, then people will see the fee increases as something of further proof of changing fortunes.

This is mainly because many crypto analysts argue that fees spent on a network are a far more accurate indicator of demand than pure transaction count or volume, since these two factors can be vulnerable to spoofing to inflate their numbers.

Bakkt anticipation

Of course, it could be that this slight dip in Bitcoin price is a result of Bakkt, which is due to be launched in two days. Ordinarily, one would expect that Bakkt’s launch, which was much anticipated for over a year, should drive the price up immensely. However, after many delays and uncertainties, since they first announced a regulatory compliant Bitcoin futures that would be settled in physical Bitcoin, interest has been waning, and any positive gains from the launch are considered by many to be already priced in.

Thus, only a launch on Monday that takes place without a hitch would bring some relief to Bitcoin price. Anything less, and we could see even further slippages, although that should be minimal since another delay or negative outcome shouldn’t really be of that much a surprise.

Apart from Bakkt, one should also remember that two other competitors, VanECK and SolidX, gave up and abandoned their own plans for a Bitcoin exchange-traded fund (ETF). Had they been approved, institutional investors would have a clear path for accredited investment into the Bitcoin market. Remember, though, no one gave those applications a chance, so most would have expected only Bakkt as the sole hope for approval by the SEC.

And perhaps most important as a clue for Bakkt has been the okay from CFTC, and a go-ahead as well from the NYDFS for insurance of up to USD 125 million on Bitcoin custodian services (which was also rumored to be the big whale move we witnessed two weeks ago).

If these weren’t enough, we’ve also seen very public backing from both Fundstrat (through its ever vocal Tom Lee) and US presidential candidate and also ever vocal, John McAfee.

Whether or not Bakkt will truly “improve trust with institutions to crypto” or if it can really “jump-start crypto adoption”, we only have to find out with time.

 

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