Okay, sure, the recent Bitcoin and cryptocurrency downturn is happening a little quicker than expected but it WAS expected, and therefore no real cause for concern.

Everything has been pointing to a market retracement over the past week. Volume has been low, and the price of Bitcoin had reached the natural reversal point that the downtrend pattern predicted. With no significant developments or news to push it through resistance, there was no reason BTC would continue past $7,500.

Previous support levels in July were higher than those experienced in June, indicating a reversal on the current pattern and a slow change into more bullish sentiment. This pattern reversal is something that will likely spread out over a few months though until more volume enters the market.

Market movers

If you look back at various news stories over the past year, it seems unlikely that a simple change of heart from Goldman Sachs regarding a BTC trading desk would have such a significant impact. It may well have influenced a slightly faster decline, but it’s unlikely it would have outright instigated it. (It’s more likely that positive news from CNBC would have caused the crash.)

Even the market reactions following the rejection of Bitcoin ETF’s were not as drastic as this recent one, and they would have a greater overall impact on the future of cryptocurrency. Regulation and developments can certainly attract or repel investor interest from the market but in themselves don’t alter natural market movements.

Zooming out on any BTC/USD graph over the past few months reveals a clear price pattern that BTC has stuck to despite a number of ‘shocking’ news stories and ‘amazing’ developments. Admittedly, there is some very concerning evidence of possible manipulation and there has been some activity on very large Bitcoin wallets recently, so possible dumping is another factor that could have accelerated a sell-off. However, resistance at $7,500 was still likely either way.

Keep in mind, the ICE and NYSE Bakkt project is still on course for a launch in November and enterprise blockchain adoption is at an all-time high. If the current pattern follows the path its on (as it has been doing for months), Bitcoin may well see sub-$6,000 levels again before recovery. I would imagine BTC is going to trade somewhat horizontally between this $6,000 – $7,500 level for awhile still unless the Bitcoin ETF gets approved in a few weeks, which – let’s be honest – is not likely.