The bitcoin prices, as we had mentioned in our forecast yesterday, went on a consolidation mode, a day after the fork was cancelled. The market is still evaluating the effect and the impact of the cancellation and these uncertain times are clearly weighing on the bitcoin prices in the short term. Once the market is convinced that all is good with the network, then we are likely to see the prices rise again but we believe that the scars of the cancellation are likely to remain underneath for a while in the industry. The first couple of forks that were done during the year had passed off peacefully with no major impact but the fact that the largest fork got cancelled due to confusion and uncertainty has raised fears that all may not be well with the network.
Bitcoin Market In Confusion
The network does need to expand periodically and hence the reason for the fork was something that everybody agreed upon. But what this cancellation has brought about is uncertainty over the forks that may arise down the line. The lack of consensus in the network should worry the traders as the subsequent forks are also likely to lead to confusion and uncertainty and this is not good for any market, especially for a market like bitcoins where a large part of the prices and liquidity are driven by speculators who can turn at the drop of a hat. It is this lack of confidence that is likely to lie underneath and eat away on the market confidence atleast until the next fork is completed.
In all this uncertainty, it is the ETH industry that seems to have gained a lot of confidence as this confusion in the bitcoin market is likely to push the traders towards other cryptos that they begin to consider as more stable and with less confusion. With ETH being the next biggest crypto, it is no surprise that the price of ETH has been increasing ever since the fork was cancelled in the bitcoin industry. The demand for ETH has clearly increased and it now seems to be on a new bullish leg which is likely to drive prices higher.
Looking ahead to the rest of the day, we expect the consolidation in the bitcoin market to continue with the region around $7000 serving as some strong support at this point of time. In the meantime, the ETH prices seem to have got a second wind and are likely to continue their rise as the demand increases.
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