Crypto market forecast: 2nd September

It was a bearish end to August for the crypto asset markets. Market benchmark BTC fell 5% over the last 7 days, while the overall crypto market cap pulled back 5%. The week was underscored by a sudden drop on the 28th of August that saw the BTC price fall 7% ($10,200 to $9,500) in just a few minutes.

The likely driver of this drop was the close of a major round of CME Bitcoin futures contracts. Over 50% of CME Bitcoin futures open interest expired last week. It’s likely that most of this money flowed out of Bitcoin futures and into other derivative markets. Daily volumes for BTC on the CME have been steadily falling over the last two months and institutional traders may be looking at other asset markets for new profit opportunities.

The BTC markets were able to consolidate following Wednesday’s drop with the $9500 level acting as support as the week progressed. Large-cap alts such as ETH, LTC, and BNB, however, did not enjoy the same consolidation following the mid-week dip, ending the week down ~9%, ~11%, and 18% respectively.

The short-to-medium term prospects for Crypto’s second-largest asset, Ether, continue to divide opinion among analysts. ETH bull Chris Burniske makes the argument that ETH is enduring its 1st mainstream bear market, just as BTC did in 2014/15. His view is that it is an excellent period to accumulate ETH due to bubbling network momentum and growing on-chain activity, suggesting undervaluation and an approaching cycle bottom.

However, the asset’s continued poor performance in BTC terms, the ongoing dumping of ETH holdings by ICO projects, and the network’s uncertain development roadmap suggest further short term pain for the token which has fallen ~21% in the last month.

In ecosystem infrastructure news, leading cryptocurrency wallet provider Blockchain announced that it has signed a deal to integrate with popular crypto payment processor Bitpay. Blockchain has ~41 million users who will now be able to pay for goods and services with crypto. The company also announced that they will soon be launching a digital asset exchange with ‘microsecond’ transaction speeds.

Upcoming events in crypto

1st September- Cross network community AMA

Operators of the Credits, Matic, Quarkchain and Holochain networks, all relatively new projects with simmering community interest, host an open community AMA (‘ask me anything’) at the start of this week. Sentiment from the AMA has the potential to affect short-term buy/sell action of the respective projects. Credits (CS) has enjoyed an excellent trading week in the lead-up to the AMA rising ~31%.

2nd September- Bitcoin.com Exchange launch

The Roger Ver and Bitcoin Cash backed Bitcoin.com will launch a new cryptocurrency exchange this Monday. Ver’s history of misleading users of the failed Mt.Gox exchange, and dubious marketing practices related to BCH, mean that industry insiders are skeptical of the project. Bitcoin.com, however, remains a powerful URL and the exchange may get some traffic from new ecosystem participants and BCH fans. The price of BCH fell ~8% in the last week.

It was a difficult trading week for large caps with a number suffering double digit losses. BNB was the week’s biggest loser amongst the top 10, falling 17%, despite news on Friday that the token will be natively supported by Samsung’s flagship S10 smartphone. The announcement failed to create new buying pressure. BNB’s recent price performance suggests that bears are firmly in control of the BNB markets.

Bitcoin bulls will likely be happy to see the back of August with crypto’s leading asset sliding 8% over the last month and losing its 5 figure US dollar valuation. Some have suggested that a reason for Bitcoin’s recent poor performance is that many buyers are attending the 9-day Burning Man festival, which is popular among Techies and VC investors. Bitcoin may be entering a short term trendless market, with no clear macro indications providing a signal for Bulls or Bears to take the lead.