Although shedding one third in value, market sentiment remains strong for bitcoin.
- Lightning network continues expansion on Mainnet
- Market cap loses near one third in value
- Huge surge in trading volume sees bitcoin regain losses
The excitement and optimism continues to build surrounding the ongoing expansion of the Lightning Network on Mainnet. This week it has been noted via social media that the number of nodes and the total payments structure continues to grow at a steady pace.
Bitcoin lost over a third of its market cap early in the week, despite some strong indicators for bitcoin being in good shape. Transaction fees are down making bitcoin transactions more accessible. There are less pressures on the network and uncleared transactions are reducing significantly.
It is unclear if those positive developments have shaped market sentiment. What is clear is that a huge surge in trading volume seems to have put the wind in bitcoin’s sails. But with the week drawing to a close there seems to be some downwards pressure on the price of bitcoin.
Bitcoin trading began the week at US$8,792.44, according to pricing data from CoinMarketCap and it became clear as the week was underway that bitcoin would continue losing ground. Bitcoin hit a midweek-low of US$6,094.54, a price level not seen since 13 November 2017.
Strong market confidence was on display as the week wore on. Over the four days to 10 February, bitcoin managed to regain its previous losses and further capitalised rising to above US$9,122.55.
Closing out week bitcoin was sitting just below its perch from the beginning of the week. With signs of downward pressure on price bitcoin was showing US$8,161.80 as at the time of writing.
Bitcoin’s market capitalisation ran in line with price differentials, starting the week at US$148.1 billion. Bitcoin’s market cap soon took a nosedive and after the dust had settled, nearly a third of its market cap had been wiped away.
The market was not deterred for long and with a huge surge in trading volume in the 12 hours after reaching the bottom, bitcoin’s market cap was on the march again. Bitcoin regained its losses and then some, hitting a week’s high in terms of market capitalisation at US$153.7 billion.
As the week drew to a close market cap had dropped marginally from its peak, but still leaving the market buoyed by a US$137.5 billion market cap.
24-hour trading volume
Trading volume this week has shown that the market may have significant confidence in bitcoin. Trading volume across the market was relatively subdued in the early stages of the week, reaching a range of between US$6.3 billion and US$7.3 billion.
As bitcoin’s price was reaching the trough strong and sustained trade began lifting bitcoin skyward once more. In the 12 hours immediately after the the week’s low, bitcoin trading volume peaked at between US$13.5 billion and US$14 billion.
A strong rally such as the one witnessed in the week suggests that there could be a strong sentiment for the market going long on bitcoin. Trading volume has since tapered off more than halving in value, returning to levels seen in trade earlier in the week in the US$6.5 billion band.