I read a really interesting article yesterday about the current downturn in the crypto market.
It seems everyone is losing their heads over it… so take a read at the original article HERE (All credit to ArsonBunny on Reddit)
I’ll briefly run over some of the points here.
EVERY year there has been a 20% to 30% dip in the market from Mid January. A couple of main reasons being:
- Asian markets sell investments back to fiat due to new year spending needs
- US people sell investments in January to defer capital gains tax liability an extra year.
This year has seen excessive fluctuations, both long in December and as such a larger drop over January, as much as 50% or more on some coins. There’s been added factors into the market which may have caused this.
Firstly the December pump:
- Crypto’s are more prolific on public news and social media
- Reports of huge gains for investors
- Many more companies started and running their social media hype marketing
- More public investment jumping in on the hype
Then the January dump
- Further news RE: China cracking down on Crypto exchanges
- Korea news also puts pressure on crypto exchange regulations
- European governments discuss Crypto regulations
- Newly formed BTC futures expired enabling shorting (and questionable manipulation by contract hedging)
- Bitconnect Ponzi shut down (added crypto negativity)
- Price drop instills fear in the public hype investors who pull out
The January dip was also expected by some who’ve noticed the previous January dips. This article by Cryptovkng on The Bitcoin Pub back in November 2017 (Full article HERE)
It was predicted there would be a Crypto Crash between January 4th to 15th 2018.
How was his prediction?
BTCUSD, Jan 4th to 15th, 4hrly chart. Charts from TradingView
The prediction was based on previous January movement for the reasons stated above. And certainly there was a steady downtrend between these dates.
However there had already been a huge dip before Jan 4th, starting December 17th and it’s continued to dip until today (23rd January 2017)
BTCUSD, Dec 17th 2017 to Jan 23rd 2018, 4hrly chart. Charts from TradingView
There’s still a lot of bearish news around and prices aren’t expected to recover just yet.
So, it’s time to hold tight if you’re already invested (like myself) and it’s a great opportunity to learn more about this new market.
I couldn’t have learnt all this without being a part of a great online crypto community and education. Our crypto group has been a wonderful hub of research, knowledge and support. Had I not been part of this group, I’d have probably been a public investing in on hype, and by now, pulled out and lost a lot of my risk capital.
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