Give Bitcoin Some Time
With the cryptocurrency market seething from the massive amount of loss that it has incurred in the past seven days and since the beginning of this month, it is safe to say that the sentiment of the community right now is not very appealing. There is a lot of widespread panic with people calling this the end of the cryptocurrency market, saying that the industry is on its final legs and is about to breathe its last breaths.
The amount of speculation that is doing the rounds right now within the community is insane and is getting the entire community caught in a terrible vicious circle, that is forcing the market into a downward spiral. The speculation over this being the markets do-or-die moment because of the large amount of volatility right now is making people panic, which is causing people to sell their altcoin and Bitcoin assets, which is only further adding to the market’s volatility.
Yes, the crash is real and the price of Bitcoin has gone down drastically over the last seven days and the altcoins are bleeding after having incurred losses of close to 50%. But let’s be honest for a second. The cryptocurrency market has faced and bounced back from worse and the reason that this is being coloured in such terrible shades right now is because the entire community was preparing for the next bull that has so widely been prophesied about.
Since the bull last year, there have been many, many predictions about when the next bull will be and how high the prices will go this time. And when Bitcoin started to pick up in July and breached the $7,000 barrier, the cryptocurrency community drew parallels between the trends now and that of those from last year and were mentally prepared for the next bull. But come August and Bitcoin along with the other altcoins plummeted to the ground, bleeding as the market suffered a $20 million dollar dump.
Reasons the Market is Crashing
The market is being painted red with losses in the last seven days as the cryptocurrencies are incurring losses between the range of 5-17%. The world’s second largest cryptocurrency, Ethereum, for the first time since last November saw a dip that made it drop below the $300 USD mark to a new all time low for the coin. Ethereum, in the most recent market crash, experienced a loss of close to 28% over the last month. Other coins from the top 10 list of the cryptocurrency ranking have similar stories to tell, with the Ripple falling by 12.06%, Bitcoin Cash by 13.05% and Stellar at 8.28%
The reason being cited for this crash right now is the market correction that is currently underway post the June 18th prices surge that the market saw, in which all cryptocurrencies including Bitcoin, saw major gains. Another reason that Bitcoin saw a major decline over the last month was the SEC’s decision to postpone its verdict on the VanEck SolidX ETF proposal. While earlier the Winklevoss ETF proposal was rejected, the community was pretty sure that the VanEck SolidX proposal would’ve come through, but the postponing of the verdict to September sent the market into a short-spur of panic that lead to further losses.
The cryptocurrency market has a pretty straightforward indicator that can be used to predict whether cryptocurrencies are going to rise or fall. This indicator is the Bitcoin trendline. In all previous crashes and bulls it is clear that the deciding factor of whether the altcoins in the market will make gains or suffer losses depends on bitcoin. If Bitcoin does well, the altcoins will do well, if Bitcoin slumps, altcoins plummet.
But for the first time, in the most recent crash, it has been noticed that Bitcoin, in comparison to the other altcoins, has been quite stable throughout this crisis and its market dominance has actually benefited from this crash. Bitcoin, though it is also bleeding out at a 4% rate, has managed to keep afloat in this market crash and has brought up its market dominance to just over 50% as the community clings on to Bitcoin.
This particular market crash that the community and market is bearing witness to is different from the ones that have happened before. This is because, for the first time, the market crash is not being led by Bitcoin plummeting. There is a serious decoupling that has happened between the progress of Bitcoin and the other altcoins which is an extremely rare occurrence in the market.
Reasons to Wait
Though the cryptocurrency market is in the face of possibly one of it’s worse-off market crashes, all hope is not lost. Because the market is very resilient and has bounced back from worse. There are instances of altcoins having lost almost 100% of their values and having bounced back in a couple of months.
The reason the market is suffering such widespread loss is because there is a market correction that is going on which is sending the market into panic and further increasing the volatility of the market. But the thing is, over the last couple of years, it has been observed that the percentage of volatility to expect from the cryptocurrency market is between ~80-90%. Meaning, the natural volatility that the market faces is common and is nothing new and that there is no reason for the community to panic and sell-off at such drastic lows.
Another major reason that the community is seeing a lot of Bitcoin sell-offs is because of the pending ETF applications and the one that they rejected last month. Currently the SEC has 12 ETF applications under its consideration and that had the market hopeful for further gains until the Winklevoss proposal was rejected.
The Winklevoss ETF proposal rejection came as a 92-paged document that repeatedly stated that the rejection is not a reflection on the regulatory body’s view of the market, but rather on the proposal itself. Which the SEC claimed was too loosely-worded and posed too high a risk.
But this rejection was not taken too badly by the community because the reasons seemed legit and it was the second time the same proposal was being rejected. The ETF proposal decision the community had had its hopes pinned was the VanEck SolidX proposal from Chicago Board Options Exchange, which was due this month. However, recently the SEC announced that they will only come to a decision in September, further pushing away the decision.
This postponement of the verdict caused a lot of panic in the community and a lot of people ended up selling because they interpret the postponing as a rejection. But that is far from the case, it is public knowledge that the SEC’s commissioner is petitioning on behalf of the cryptocurrency community and that the CBOE has a very high approval rate with the SEC.
The postponement is merely a plea for more time on the part of the SEC and is of actually no reason to panic, for the decision will be made and almost all predictions predict the vote going the way of the community.
This year, more than any year before and the ones to come, has been very cryptocurrency and blockchain oriented. Post the December bull, the cryptocurrency market could no longer be ignored because it was showing rates of growth that have never been seen before. The cryptocurrency market and the blockchain industry became talking points in all Parliaments and government bodies across the world for the first time on a positive footing.
This year could very much go down as the year of Bitcoin with so many governments and regulatory bodies and their officials coming out in support of the market and industry. The year of 2018 is Bitcoin, the cryptocurrency market and the blockchain industry’s make or break year. Which is why there is all the more reason to not panic and wait for the market to climb again. Don’t let these short-term losses make you lose out on the long term goals that the cryptocurrency market is yet to achieve.
Keep the Faith
The cryptocurrency market has come back from worse. Individual coins in the cryptocurrency market have bounced back from more dire situations. For example, Verge coin. In 2016, the coin showed a lot of promise as it rose to a comfortable value of just over 54 Satoshis. But, after having ended the year at such a high position, sank all the way down to 1 Satoshi in 2017. The Verge coin (XVG) ended 2017 valued at more than 1,800 Satoshis which is a remarkable recovery from where it started 2017.
The recovery of Verge is the textbook example of recoveries that the altcoins in the cryptocurrency market are expected to make over the next couple of months.
It is important to remember that things are going right for the cryptocurrency market and blockchain industry regardless of this technical correction that is causing it to crash right now, with respect to regulations coming in and more governments passing bills to legalise them and their use. Yes things look bleak right now with the market cap slipping below $210 billion dollars for the first time in nine months, but HODL and ride the downward waves out, Bitcoin and all the altcoins will make a comeback, just give them some time to settle.
The blockchain is the future of the world’s technological needs and the community needs to be reminded that up’s and down’s are a part of every market and the cryptocurrency market is no exception. Believe in the technology and spearhead the way into the future as the blockchain is the way forward. Sit tight and ride the downward trends that all the altcoins are displaying right now, because it is just a matter of time before you see the market value of them shoot right back up again.
Also, read: Top 6 Crypto Trading Strategies