Crypto market forecast: 10th June

The crypto markets continue to lean bearish in June with another round of sell-offs ending the week in the red. The price of market benchmark BTC fell by ~9%, and it is currently trading at ~$7,730, well below the ~$8,000 level. The second and third large crypto assets by market cap, ETH and XRP, fell by ~12% and 11% respectively, with all altcoin markets falling alongside Bitcoin. The total crypto market cap fell ~11% in the last week.

However, after the market-wide leg-up in May, many crypto analysts were expecting a significant pullback. Analysts are pointing to both on-chain metrics and event based assessments, with some suggesting that May’s price gains were driven by large speculators, and not a genuine increase in the demand to use digital assets, or an increase in retail volume.

This narrative suggests a small group of traders with significant capital may have created volatility by buying in large amounts to generate profits by liquidating short positions, and front-running potential bull market triggers such as the launch of the TD Ameritrade crypto trading platform. If this is the case, these traders who were quick to buy in May, may be just as quick to sell in June creating the potential for further pullbacks.

In the medium term, there is a case to be made that this assessment leans bullish, as this would mean that May’s gains were achieved without mainstream retail participation. This opens the possibility for larger Bitcoin and crypto gains later in 2019 if a wider pool of retail participants returns to the crypto markets. In the short term, however, the crypto market price signals lean mixed to bearish.

In wider ecosystem news, on the 4th of June, Finland-based global Bitcoin peer-to-peer marketplace LocalBitcoins officially confirmed the removal of cash trading from its platform.

By connecting users willing to exchange cash for Bitcoin, LocalBitcoins made it possible for individuals around the world to acquire Bitcoin without having to join an exchange or KYC. However, the company now says that due to its obligations as determined by Finland’s Act on Detecting and Preventing Money Laundering and Terrorist Financing, the exchange must follow certain sanctions, including the removal of cash trades. The decision marks the end of an era as LocalBitcoin’s cash trading services provided the initial gateway into the crypto ecosystem for many Bitcoin users.

This week in crypto events

12th June- CryptoCompare Digital Asset Summit

This major European crypto event takes place in London this Wednesday. The event connects institutional, retail and regulatory crypto experts and aims to foster the relationship between disruptive blockchain technology and traditional finance. Notable speakers include Andreas Antonopoulos, Peter McCormack, and Gillian Dorner, Deputy Director at HM Treasury (UK).

15th June- Kin token mainnet swap to Kin blockchain ends

Over the last 3 months, holders of Kin, the native token of the Kik messaging app, have been able to swap their ERC-20 tokens for native blockchain Kin tokens. The Kin blockchain is a fork of the Stellar blockchain and swapped Kin tokens will have significantly different utility from its ERC-20 form. Kik has been in the news following a lawsuit filed against the Canadian startup alleging that Kik’s digital token sale was not compliant with U.S. securities laws. The project’s future remains unclear due to the lawsuit, however, project development appears to be continuing.

It was a week of double-digit red trading for the most large-cap crypto assets. The largest gainer in the top 10 was stablecoin USDT, suggesting increased demand for a safe haven to hedge against further price falls. EOS was one of the week’s big losers. On the 4th of June, the crypto rating agency Weiss downgraded its rating for the blockchain token due to centralization concerns. Outside of the top 10, as highlighted by Cryptocurrency Newsfeed, BAT was able to resist some of the market wide selling pressure following the release of a new version of the Brave browser.

The Bitcoin markets dropped sharply over the last week accented by strong sell-offs on Monday. Bears were able to push through any potential support at the $8000 price level and the price now hovers close to the psychological ~$7500 level.

On the Bitmex Bitcoin derivatives platform, the last 24 hours have seen strong growth in the number of shorts vs longs, suggesting a flip towards a more bearish sentiment on the Bitcoin futures markets.