Larry Shover, the chief investment officer at SFG Alternatives, recently told Bloomberg the cryptocurrency market continues to “remain dominated by speculators who love volatility.” Shover’s comments came in response to bitcoin (BTC) tumbling more than 12% in the past two days, after reports suggested Goldman Sachs wasn't going to launch a crypto trading desk anytime soon. The firm's CFO later revealed its still planning to launch it.
On August 28, bitcoin's price surged past the $7,000 mark and market analysts were discussing whether the flagship cryptocurrency would be able to move past key resistance levels. However, it then dropped sharply from nearly $7,390 to below $7,000 on September 5, and continued its decline. The flagship cryptocurrency is now trading at $6,479 according to CryptoCompare data.
"Hard To Get A Technical Range"
As crypto traders try to determine the next level of support for bitcoin, Shover pointed out it’s still unclear whether the cryptocurrency is a commodity or a currency, “so it’s hard to get a technical range on it.”
“If [bitcoin] is a currency, or a replacement for fiat, [then] it’s doing a very poor job of being a store of value.”
The veteran equity and derivative trader also questioned what exactly bitcoin was correlated to, while noting that “there are a lot of people out there” who are concerned about what the next support level for the crypto might be.
He further commented that $6,000 may be the next closest support level for bitcoin, but he thinks it’s “hard to know” exactly as there remains a great deal of uncertainty in the crypto market.
"Big Blow" For Cryptocurrencies
Shover also remarked the digital currency industry is:
“desperate to [gain] legitimacy and the news about Goldman Sachs, although they’re [involved in the crypto] business...they’re not actively trading [crypto]...[but] the masses are actively looking for legitimacy [before they begin] trading themselves. So, yesterday’s news that [Goldman Sachs would not be launching a crypto trading desk] was a severe blow.”
As CryptoGlobe reported, Stephen Innes, the head of Asia Trading at Oanda Group, has said cryptocurrencies would remain “thinly traded” due to lack of institutional support. Innes also noted that lack of proper “regulatory oversight” and the “intense, intense scrutiny” over the fraudulent activities associated with cryptocurrencies have kept institutional investors from making substantial investments in digital currencies.