Crypto investors are often surprised by the inexplicable fragility of the entire market where seemingly inconsequential news is enough to dictate the buying or selling tendencies of the majority of traders. Now Dogecoin creator Jackson Palmer thinks he knows why this is so, and it has something to do with the very low usage of cryptocurrency networks.
Market Movement After SEC Postpones ETF Approval
Jackson Palmer posted on Twitter a lengthy tweet on August 8, complete with graphs to support his theory.
Something tells me there is more to this than just an ETF not being approved. 🤔 pic.twitter.com/K4P8pojpAE
— Jackson Palmer (@ummjackson) August 8, 2018
The post shows the top cryptos by market capitalization, which also includes the percentage of change. At that time, all of the top seven cryptos suffered substantial price declines with EOS down by 22.3 percent, while XRP declined by 19.5 percent. Even Bitcoin was not spared. The largest crypto suffered an 11.36 decline at the time Palmer made the tweet.
Palmer captioned his post with the message:
“Something tells me there is more to this than just an ETF not being approved.”
Incidentally, the downward market movement came right after the Securities and Exchange Commission (SEC) postponed its decision on Bitcoin ETFs. Analysts have been predicting SEC’s move already, so it should not come as a surprise to most crypto traders. In fact, many believed that it will have very little or negligible effect to crypto prices at all.
In addition, the SEC’s decision should only have affected Bitcoin’s price. However, it was not only Bitcoin that was affected by the announcement but the entire market as well.
Crypto Network Usage
Palmer went on to speculate that the low usage of cryptocurrency networks might have something to do with the fragile market. To support his claim, he posted a graph showing Bitcoin’s confirmed number of daily transactions. After a spike in December 2017, the graph showed a general decline. He then captioned the graph with the statement:
“Perhaps it could have something to do with this?”
Palmer also posted two other photos showing XRP and Ethereum usage. He concluded that transaction count is not a suitable measure of adoption. The logic is broken and could perhaps explain why the crypto market is so volatile. He said:
“People in my mentions inform me that a network built for processing transactions actually processing some transactions *is not* a suitable measure for adoption. This broken logic explains a lot about why these markets are so fragile”