For two months now the price of Bitcoin has ranged between $6,500 and $6,800. In that period, only two times has BTC managed to test the $6,800 resistance level. Other than these two times its price has shown little momentum past the $6,000 region.
Is Bitcoin Stagnating?
According to Jani Ziedins, a cryptoanalyst at Cracked Market, the stagnation of Bitcoin in the $6,000 region shows a chronic lack of demand for the digital asset.
“Bitcoin is still struggling to break $6.8k resistance. If buyers wanted to buy this dip, they would have jumped in already. The chronic lack of demand at these levels is a concern, and the path of least resistance remains lower.”
However, though these comments spell doom for Bitcoin, Wall Street firms seem to have a different opinion. On October 3, a group of Wall Street companies led by Chicago Board Options Exchange (Cboe) and $30 billion brokerage giant TD Ameritrade announced their support for ErisX.
ErisX is the first multi-cryptocurrency futures market that supports Bitcoin, Litecoin, Ethereum and Bitcoin Cash.
Don Wilson believes that ErisX will eliminate the barriers that hamper institutional adoption of cryptos. This move will help usher in the next wave of market participants. Wilson is the founder of a DRW, a trading tech conglomerate.
Despite the 69 percent drop in the price of Bitcoin, the participating Wall Street firms believe that there is sufficient demand in the market, for transparent and regulated crypto-related platforms.
Commenting on this, JB Mackenzie, the Managing Director of Forex and Futures at TD Ameritrade, said:
“We expect we will have customers interested in participating. The digital asset economy has been developing so much over the last nine months, and investors are crying for a regulated, transparent platform.”
Another reason that may be causing the price of Bitcoin to stabilize at the $6,000 level is the use of bots. Recently, the Wall Street Journal reported that a large number of traders in the crypto market are using bots in a bid to manipulate the market.
This report was confirmed by the CEO of Binance, Changpeng Zhao. He acknowledged that traders have been using an algorithm that consistently files thousands of orders in 10 minutes and this has stabilized the price of Bitcoin at $6,000 level.
“That is one weird algo. Will ask the team to look into it. However, the minute we interfere, they will complain all over social media, ‘Binance blocked my account!’ No happy medium.”
Basil has three years of freelance experience writing on disruptive technologies. He focuses on breaking news and education pieces; helping to spread the gospel of Blockchain. He hopes to have his own blockchain company one day; helping the world through its innovative ledger technology