A Tug-Of-War Between the Bitcoin Bears and Bulls is evident right now. The huge sideways movements in prices continue to stun investors. Though the bulls were weaker against bears over the last few weeks, they applauded the welcome development from the latest Senate Banking Committee meeting – at least for some time.
The Tug of War Between Bears And Bulls
The tug of war intensified at the start of this week; Bitcoin (BTC) price was trading around $8300, but the bears instantly confined the markets and pulled back prices to $6000 – the lowest price in 3 months.
Increasing regulatory concerns from China and India added to bearish sentiment; big banks were also blamed for strengthening bears stance, amid their decision of banning the use of credit cards for buying bitcoin.
Fortunately, the position of requiring more time and powers from the U.S. financial regulatory commission chairman before the Senate Banking Committee helped bulls in moving back bitcoin prices above $8400 at the time of writing.
Moreover, Mr. Giancarlo, chairman of CFTC, hasn’t responded adversely to the huge volatility in bitcoin prices.
He said: “Bitcoin’s volatility was not as large as other asset classes like [the] VIX. We have seen extreme volatility in bitcoin, but in our world [commodities], we are used to volatility in asset classes.”
The war between bulls and bears created a huge sideways movement of billions of dollars in Bitcoin and other cryptocurrency prices. The total market capitalization bounced back to $400 billion on Wednesday (the same range where cryptocurrencies started the week), after falling to $275 billion at the top of the selloff.
Who Will Win?
It’s hard to predict who will win the price war between bulls and bears. The market responds quickly to reports from regulators and market pundits. The majority of financial regulators and major fund managers are questioning the underlying value of these cryptocurrencies. Meanwhile, bulls are moving prices on speculations.
SEC Chairman, Jay Clayton, while commenting on the volatility issue said: “I don’t really know what’s driving volatility in bitcoin and cryptocurrencies. [Cryptocurrencies are] not correlated with sovereign currencies, so it must be something different than what would move the dollar. But that’s one of the issues before us – there does appear to be a lot of volatility compared to the medium they are supposed to be replacing.”
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