On Friday, August 19, the crypto market fell like a brick, but more importantly, the market cap that fell below 1 trillion dollars. A psychological barrier that we’ve been trading above for three weeks, convincing investors that the low of $780 billion on June 18 was the absolute bottom. At the time of writing, Bitcoin has recorded a minus of 7.70 percent for the past 24 hours, while Ethereum has to make do with a minus of 10.71 percent.
Problems in the futures market
The futures market shows that the sentiment is currently bearish. Normally, Bitcoin is referred to as “contango”, which means that the futures price of an asset is higher than the spot price. Contango occurs when the price of an asset is expected to rise over time. On that basis, investors want to pay a “premium” over the spot rate. In a healthy market, Bitcoin trades at a premium of 4 to 8 percent on an annualized basis.