Why Bitcoin is Falling
The cryptocurrency market is falling. This is something that we all know. In fact, the fall was predicted as early as December last year after the cryptocurrency market bull in which the price of Bitcoin went up to almost $20,000 USD.
After which the market peaked and there was a steady downward trend. But this was expected. However, over the last month, the cryptocurrency market has had a particularly bad run. With Bitcoin losing $500 USD from its value in a matter of hours.
The six-hour low, however, was just the beginning of a large surge that the cryptocurrency market was going to take. In the downward trend that the Bitcoin and further all the altcoins took, saw Bitcoin dropping below all support lines and levels that were set out for the same.
In the fall, Bitcoin went down below the $4,000 USD mark as well. While most people in the community knew and were prepared for the fall, nobody in the community suspected that it would be this bad.
There are multiple reasons for the market crashing. And there are more predictions as to the final support line as well. Here are a few reasons that triggered the fall of Bitcoin and why it will last till the second quarter of 2019.
The Bitcoin Bull
Everything that goes up must come down.
In December 2017, the cryptocurrency market was in the middle of one of its biggest bulls to date. In which all the cryptocurrencies, with no exceptions, peaked at their all-time highs. The bull itself lasted a couple of weeks.
But the months that followed saw the cryptocurrency market come back down the same peak it climbed. Which is when it became apparent that the year following the bull will bring the cryptocurrency market down.
And it has been a year-long slump for the cryptocurrency market.
Bitcoin Cash Split
Bitcoin Cash prepared its community for a routine network update that happens annually. But this time the community had conflicting ideas on how to take the coin forward and because there was a lack of consensus the Bitcoin cash Blockchain split into two led by two big names in the industry.
Both sides ended up having a hash war to decide which of the two coins would continue to use the BCH label. The hash war that ensued ended up diverting a lot of mining power from Bitcoin to BCH, which further aided the fall that Bitcoin was already on.
Capital Gain Taxes
A lot of first-time investors in the United States are being faced with large capital gain taxes. They are specifically being taxed for the gains that they made last year in the bull.
The taxes that they are expected to pay are too high and the investors either don’t have enough money to pay them or enough cryptocurrencies. The reason the capital tax gain is adding to the problem Bitcoin is facing is because it has led to further sell-offs in the market.
All US investors, regardless of the bear market, are selling their cryptocurrency assets off before the file taxes next year in April.
Hitesh Malviya is the Founder of ItsBlockchain. He is one of the most early adopters of blockchain & cryptocurrency enthusiast in India. After being into space for a few years, he started IBC in 2016 to help other early adopters learn about the technology.
Before IBC, Hitesh has founded 4 companies in the cyber security & IT space.