Photo: images.google.com
There is no single reason why bitcoin is on a downward trend. Several reasons, including many new people buying bitcoin at premium prices with more speculation, have actually taken prices at all times.
Now that all beginners have bought - demand has fallen and according to basic rules for demand / supply - when there is no one to buy at high prices, it should fall. That was what happened when it returned from 19K to 16K and then to 15K and then oscillating between 13-15K; 10-12L; 9-10K and finally hits new lows today at 7K.
As the price drops, there is no shortage for bitcoin bashers to pass different comments and media misinterpret official statements from governments and many more events have eventually led to the fall in prices.
Why all other altcoins go down?
Alternative crypto curves or commonly called altcoins - either created as tokens on ethereum platforms or with their own blockchain and aiming to build the next bitcoin or next ethereum - no matter what the value they give are all on the same downward trend and Diagrams look more or less the same.
The reason for this is mainly that they are all traded with a base coin and that is King Bitcoin! Almost all major exchanges trade other coins with BTC pairs. This means that people should have bitcoin to trade with other currencies. When the bitcoin falls down, people panic and sell (not experienced dealers but many others) or some people convert their alts back to bitcoin to be safe. The result is further decline in demand for altars and they will go south.
Therefore, most of the coins have the same chart pattern as bitcoin.
WTF is a correction?
This is a favorite term for many experienced bitcoin investors, believers and retailers. Correction is something you look for a massive and exponential increase in the value of something. This generally happens as the product or asset could have been overrated because of hype and overcrowded by people. When it reaches the point when there are no speculative buyers - the price begins to fall until it finds support (high demand at a given price).
For each wild drive based on pure speculation we must see a downturn because it is not the actual price for that asset. When the hype ends, the price must return to a fair value, and this is called correction.
Correction can also lead to panic, sold by few amateur investors, as they will be afraid of loss and sell more. Not only panic sellers, they could again trigger stop order orders and bring the price even more down - this situation will lead to oversold mode and will be a good buy option. It is therefore after any healthy correction that there will be an uptrend.
thanks for information on bitcoin trading 😊
Somehow I assume that a lot of Altcoins will not recover well. The massacre isn't over yet, maybe it got time to sort out what we don't need
I definitely agree! It’s time for many altcoins to say goodbye.
Excellent post again!
You're definitely right that once Bitcoin starts dropping significantly, the bashers all seem to come out of the woodwork. It doesn't seem to matter to them that this exact scenario has played out a couple of times before and Bitcoin/altcoins always resurge afterwards.
Long time supporters know the drill and don't worry about this ;-)
This makes total sense. We're witnessing history right now. When the price is low, it will provide new opportunity to invest low, then sell high again.
Same story, different years...
I think it will be a bigger crash this time but I wouldn't be surprised if it is a bigger and quicker rally.
Interesting!
I've seen this picture and it's really interesting. I believe this year the “crash” was stronger because of action by countries envolved (regulation) and a lot of newbies investors (FOMO).
I still think it will get worse but because GBTC had a good day today we could be at a bottom.
Disclaimer: I am just a bot trying to be helpful.
I'm pretty sure the media do it on purpose. None of it is random. Reason may be they want to get in on bitcoin or crypto. Perhaps they want some institution holds all their money.
I've met several people anxious to invest in bitcoin for $100. If they had followed my recommendation they'd all be millionaires now. People are fearful of what they don't understand and follow the crowd.
@tradewonk
my lecture of the day. glad you shared this which has clarified correction so much so I can give a detailed lecture and reference @tradewonk .
But come to think of it, bad news and speculations aside, dont you think cryptos are on corrections?
Definitely it is, and it’s also the best time to buy in crypto history.
Yeah and same time every year we do have deep. Problem is most folks don't have enough fiat . Will learn the historical trend and I feel come next January we expect such again especially due to the largest migration of humans which is due to then Chinese New year. 😏
Thanks @tradewonk! I was wondering why alt coins were dragged along with the bitcoin price. The explanation makes total sense.
Will bitcoin rise again????
Sure
great news @tradewonk.
Great analysis @tradewonk. Learned something new.
Yes I was reading a post today on Business Insider just running havoc around the price of bitcoin.
Seems to be a lot of pressure and restrictions being placed on by banks aswell.
Now but this may well be a good thing in the long run if they now restrict the amount of people able to get in to purchase crypto this may actually cause an increase demand for the coins and help with pushing the price up.
When life gives you lemons, make lemonade! Use this opportunity to buy cryptos cheap. We never see many cryptos back at these prices again.
very informative. so, with the downtrend lately, do you think it's just a correction? or will it go lower than 5k?
Not unexpected yet still never fun. Best thing to do is either look away or actively watch for the bottom.
Thanks for your insight!
Maybe Bitcoin Rise Again
Great article! I'm new to the cryptocurrency world but it seems like a lot of the media commentary is based on trying to evaluate these assets in a manner consistent with how they evaluate assets from the old paradigm. They just don't seem to want to start analyzing these things for what they are.