Cryptocurrency market forecast: September 7, 2020

Bitcoin (BTC) fell approximately 11% this week, ultimately closing slightly above $10,000. On Tuesday, the price of Bitcoin briefly reached a high of $12,032 before experiencing a sharp pullback on Wednesday and Thursday. Ethereum (ETH) and Ripple (XRP) prices declined by 16% and 14%, respectively, while the overall market capitalization of crypto assets fell by about 11%.

One factor behind the price drop was miners choosing to cash out after early-week gains. Data provider CryptoQuant reported “abnormally large” BTC outflows from the wallets of major mining pools Poolin, Slush, and HaoBTC, which closely correlated with the price decline. Some of these cryptocurrencies were transferred to exchanges, suggesting that mining pool operators were looking to take profits.

Blockchain forensics firm Chainalysis also reported a sharp spike in BTC inflows to exchanges on September 2, marking the highest increase in 37 days. This suggests that market participants were also seeking to sell BTC for profit. Phillip Gradwell, Chief Economist at Chainalysis, stated that the selling pressure may not have been fully realized, as transaction intensity data indicates that many sellers were unable to find buyers.

Last week, South Korea’s largest cryptocurrency exchange, Bithumb, was raided by police in a large-scale search and seizure operation. According to local newspaper Seoul Shinmun, the seizure was linked to an investment fraud case involving the pre-sale of roughly $25 million worth of BXA tokens by Bithumb. The exchange had issued the tokens as part of a planned acquisition by the Blockchain Alliance BK, but the deal fell through and the tokens were never listed. BXA pre-sale investors claim to have suffered losses due to the failure to list the tokens. Bithumb Chairman Lee Jung-hoon is also under police investigation for transferring assets overseas without declaration.

This marks the second time in just a few weeks that a major Korean exchange has been raided. On August 26, local news reported that Coinbit was also raided by police for suspected fraud. The exchange allegedly fabricated over 99% of its trading volume and manipulated prices to earn illicit profits.

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Upcoming Cryptocurrency Events This Week

September 7 – UMA Token Launches on Coinbase
The UMA Protocol (UMA) is a decentralized financial contract platform focused on supporting priceless synthetic tokens, which are collateral-backed ERC-20 tokens. Coinbase announced that trading for UMA tokens would begin on September 8, subject to liquidity conditions. Supported pairs will include UMA/USD, UMA/BTC, UMA/EUR, and UMA/GBP. UMA outperformed the broader market last week, with a market cap increase of approximately 6%.

September 10 – Ampleforth Beehive v2 Launches
Elastic currency solution Ampleforth (AMPL) is launching a new version of its incentive program for liquidity providers this Thursday. Beehive v1 offered users up to 174% annualized returns, with nearly $100,000 already deposited into the program. To earn rewards, users must deposit AMPL and ETH into a Uniswap liquidity pool to receive UWETHAMPL-V2 liquidity provider (LP) tokens. These tokens can then be staked in the Beehive v2 incentive pool or in Geyser, where they will be locked and earn interest. AMPL’s price has increased by around 4% over the past month.

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Top 10 Cryptocurrency Summary
It was a tough week for large-cap assets in the Brave New Coin market cap top 10, with many experiencing double-digit losses. Last week, the anonymous developer Chefnomi of the yield farming-focused decentralized exchange Sushiswap shocked the community by selling all of their SUSHI tokens, the platform’s native asset. This caused the token’s price to plunge by more than 50%, exposing the risks associated with DeFi tokens tied to the Ethereum ecosystem.

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Bitcoin Price Chart
Bitcoin traders faced bearish conditions at the start of September, historically one of the toughest trading months for Bitcoin. Despite the decline, the week closed on a strong note with clear buying support at the $10,000 level.