The crypto market selloff in the last week of September has most probably marked the end of the correction.

Quick summary

  • The market has recorded the third consecutive month of negative performance.
  • Altcoins have relatively outperformed Bitcoin but it is too early to tell if this is the start of a new trend.
  • Bakkt had a slow launch but its volume will significantly increase in the future.

Market overview

September started on a positive note as the market gained 14.4% in the first 18 days of the month. This was followed by a few days of moderate retracement but then “all hell broke loose” on 24 September. Bitcoin’s price fell through an important support level and went from $10,000 to $7,700 in just 4 days. The rest of the market followed with the plunge, having lost 27.6% in 8 days. The decline was succeeded by a small rebound and overall, the crypto market lost 11.1% in September.

Monthly Commentary Chart MVIS (Sep 2019)

Contrary to August, altcoins demonstrated resilience and generally fared better than Bitcoin. Bitcoin lost 13.9%, while some altcoins even ended the month in green. Ether has gained 19.7% versus Bitcoin in September; consequently, Bitcoin’s dominance has decreased from 69% to 67.5% throughout the month. It is way too early to tell if this is the beginning of a new trend but it will be interesting to see how this dynamic plays out in the coming months.

Top 25 assets by market cap performance | September 2019

Bakkt’s slow launch

Some market participants blame Bakkt’s slow launch for the recent crypto market plunge. Bakkt started operating on 23 September and on its opening day, the trading volume was merely 73 Bitcoins. The low figure cast a shadow of doubt on the reported institutional demand for Bitcoin as previously lauded by the crypto analysts and media, and in turn, some investors started to sell off their crypto holdings.

In the previous monthly commentary, I wrote: “I don’t expect Bitcoin’s price to shoot straight to the moon on 23 September but Bakkt’s entrance to the market will undeniably have a significant impact on the Bitcoin demand in the coming months and years”.

Indeed, I remain confident that Bakkt’s volume will significantly increase in the future. It takes time for investors and brokers to accept the new product and this doesn’t happen overnight (as many hoped).

Conclusion

After a close examination of the market correction and recovery periods in the previous bull runs, I believe that the recent market selloff has marked the end of this correction. The pullback started on 27 June and lasted for three months; currently, it looks like the market is entering the recovery phase. This might be a good time to (re)enter the market or increase positions.

Watch Gregor explain this topic on video:

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DISCLAIMER: This article is for informational and discussion purposes only and does not constitute a marketing message, an investment survey, an investment recommendation, or investment advice. The article was prepared exclusively for a better understanding of market dynamics.

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