Bitcoin price has tanked by about 20% in the previous week to hit lows of $8,000. This brings into memory the sharp decline that was witnessed soon after the BTC/USD peak of 20,089 on December 17, 2017. However, there is no consensus among analysts whether the plunge would continue.
Meanwhile, there is a widespread theory in the market that the Bakkt futures launch is the causal factor of the Bitcoin bear run that is affecting the whole market.
JP Morgan Analysis
Financial and Crypto market strategists and analysts at the JP Morgan are one such group of experts who believe that the Bakkt Bitcoin futures launch triggered the market crash. According to their analysis, Bakkt’s physically-delivered Bitcoin futures have been expected to hit the market and enhance BTC adoption. However, the market reaction is characterized by low enthusiasm. This has consequently led to a drop in investors’ activity that is leading tilting the RSI to the oversold side.
ICE Involvement in Bitcoin Market Could Trigger A Bull Or Bear Run
The Intercontinental Exchange decision to delve in the Crypto market by offering Bitcoin futures has been hailed as a turning point for Cryptos. Despite the positive sentiments, opinion has been divided into the market where some investors have been forecast a bull run as others predicted a bear cycle.
On 20th September, Anthony Pompliano from Morgan Creek Digital polled Twitter users on the matter. Of the 9,418 respondents, 36% predicted that Bitcoin would rally if the Bakkt BTC futures launched. 27% forecasted a bear run, and 37% thought that the launch would have no impact on the price.
History Repeating Itself Or Maturity?
The current market situation can be viewed from two analytical perspectives. The first standpoint is a historical reference to the December 2017 Bitcoin futures by CME Group. During this period, BTC/USD started plunging soon after the launch of the Bitcoin futures trading heralding a long Crypto winter.
From this standpoint, the case for a bear run is supported and one can predict a similar bear run as seen in late 2017 and much of 2018.
The second perspective is that the Crypto market is maturing and Bitcoin futures are only triggering a short term market correction.
After the Bakkt launch, the RSI has dipped to below 50 for the first time since April 2019 indicating that most investors are selling. Tom Lee, a Fundstrat analyst, has a theory of the “rule of the 10 best days” that forecasts a bullish momentum in 10 days. Therefore, from this school of thought, investors should expect to see a turn-around in the new month.
In the meantime, the 10 days after 20th September are ideal for investment for new buyers. On the other hand, hodlers are advised to be patient and cancel sell-orders.