This Major Factor Holds Bitcoin’s Price at Stable Range
Bitcoin price has returned to its stable range which it has maintained for a while despite about 12600 new coins are minted for the market weekly. Since mid-June, the value of Bitcoin has stabilized at around $6500 except for occassional spikes in July and late August. The top cryptocurrency has maintained a straight $6400 or thereabout since the first week of September till now according to CoinMarketCap. So where could the demand that is keeping the price movement stable be coming from?
For the price to maintain this level of stability means the supply of the cryptocurrency is being scooped by demand from the market otherwise its value would have plummeted. In the past months, several developments that somewhat disrupt previous patterns of looking at the crypto market have been seen as a new way of understanding the space seems to be emerging especially with the thematics linking crypto adoption with regulation and institutional investment.
Putting it into context, few factors could be considered less responsible for the price stability. Negative media reports, dumps and prolonged bearish crypto market situation do not make the view that fresh 1,800 bitcoins are accumulated daily by new or existing individual investors so credible. Also, the suggestions that miners could be keeping mined coins or selling just a part after some time doesn’t hold much water either. This would retrospectively translate to buying the mined bitcoins back while they have mining expenses to cover and they can’t really time the market.
The case for institutions already entering the market makes a good argument as an important metric though. With the stock market sell-off expected to get worse according to Morgan Stanley, many institutions may have chosen Bitcoin to store their value against deflation. Aside trade, Bitcoin has the most attention yet of all cryptocurrencies. Its technology has been tested and reviewed over a decade while it maintains its top spot. Others in the top 10 market capitalization ranking five years ago have moved several spots – hence most of them may not be considered reliable to even be around in the next five years.
It is true that cryptocurrencies generally lack some safety nets and still scare some investors. However, Bitcoin stands a better chance to excel with institutional investors to push adoption and be considered credible like the stock market. It is the best exlanation for the current market situation thus far.