Why is crypto going down?
Why rate bitcoin but continues to decline
The prices of virtually all large crypto coins, such as bitcoin, are decreasing. How is that possible?
Many crypto investors look nervously on their screens these days. You are talking to a colleague and few percent off.
Few great site about cryp ot there has been virtually number and chart cryptocurrency for 48 hours, which records green figures. In the past 24 hours bitcoin went down 20 percent ethereum 28 percent (yesterday 20 percent) and ripple 33 percent
All cryptocurrencies together lost over $ 200 billion in virtual value in a day.
For those who boarded on time which there is no reason for panic. Compared to a year ago, most crypto coins are still worth much more. Bitcoin is worth around 7,700 euros. That is eight times as much as a year ago. The more advanced ethereum lost nearly 40 percent of its value in a week's time but is still worth 60 times more than a year ago.
But for the late loafers it is probably exciting moments. Probably they are, in bitcoin jargon, 'HODL' to each other. This rallying cry, caused by a typing error of a, presumably drunken, investor who said that despite his decline, he kept his bitcoins (I'm hodling), has become synonymous with sharp price falls and now means as much as Hold On for Dear Life.
What is going on?
The price of a crypto coin is for many a mystery. This is because there is no underlying value, such as company performance on the real stock exchange. The price of a bitcoin is the result of speculation and very sensitive to manipulation by its users and more Real estate industries want to use crypto as their payment way.
This study shows that 'suspicious trading activities' there are no rules, So you may trade bitcoins with yourself causing price rises in the bitcoin. The appreciation from 150 to 1000 dollars in 2013 was probably caused by one person.
At the moment, not only does the price of the bitcoin fall but virtually all cryptocurrencies decrease in value. This means that there is more going on and that investors are selling their crypto coins across the board.
This is probably the result of a few events. It started last week with the announcement of South Korea to ban crypto coins. This later turned out to be more nuanced: South Korea wants to introduce stricter rules. But then the evil had already happened.
The South Korean measures were imitated by France. Minister of Finance Bruno Le Maire said in his New Year's speech that he is preparing measures to restrict the trade in cryptocurrencies.
The negative influence of multiple aspects
What is important is that you realize that an effect as we now see it within the Crypto market always has several causes. It is a combination of various influences. Almost all aspects have a natural explanation. However, due to the unnatural behavior of the market in recent weeks, even months, this adjustment could not be delayed. It may sound strange because we were only used to 'good weather', but this is also how a market works.
There are some things that have started the decline and because we want to temper the panic a bit, we looked for what these things are. We have formed a picture of the most important aspects and we also try to give you a hopeful sound by telling you already that the market is picking up.
Unnatural, explosive growth within Cryptocurrency
The most obvious cause can be found in all the positivity of the past few weeks. They bought Crypto at the skate and the races did nothing but rise. Occasionally something was 'dumped' briefly and there was a small drop, but the general trend was a considerable increase. Coins like Ethereum, Ripple and Bitcoin rose steadily not to mention other diamonds.
In general, we witnessed a rise that was far from natural. The volatility of the Cryptocurrency market is very high. Strong movements are fairly normal. As a logical consequence of this, the market is corrected by itself once in a while. A correction that is needed to give coins their valuation. An increase of 300% is fun and fruitful for the fast profit packers, but for the long term an undermining of the validity of a coin. A correction is therefore desirable and only in this way can we see whether there is any viability for the long term.
What is wisdom?
Wisdom in this is the holding of your coins. Yes, you see money evaporating almost every second, but that money has not really disappeared. The combination of the above reasons ensures that the market is currently going through a 'stiff' phase. However, it is not the case that the market suddenly seems to be unreliable or completely disabled.
The expectation is that everything will be somewhat normal again in a few days / weeks. If you see how the different causes have an effect on this decrease, then you also see that this decline is temporary and will start again as soon as the substance has risen. Rest assured: your money has not really gone up in smoke. It is up to you whether you sit out these 'bad times', or whether your gut-feeling says that you now have to pull everything out. We can not make that choice for you.
So we find our first cause in the 'natural correction' of the market. See it as a kind of natural selection. If the coin survives such corrections, then we are very likely to make a solid coin. Survives' ie not dumping that trade.
The Chinese new year is imminent
We have to wait a little longer, but the Chinese new year is slowly making its appearance. What does this have to do with the massive falls?
Well pretty much. Firstly, you should know that Asia still dominates with regard to the volumes within Crypto-trading. It is Asia that accounts for the largest percentage of the Market Cap. Logically, major changes in this part of the world have a major impact on the overall Crypto market.
The Chinese new year is imminent, so people in that part of the world are going to do massive shopping, celebrate and most important of all: they will appeal to their financial resources. Read: they demand their Crypto money. Where traditional markets are flourishing when things are going well in retail, the Crypto market does the opposite. An increased amount of investment in this case means a massive dump of Cryptocurrency.
The sell orders are flying out, because Asia is preparing for a buying frenzy. Everyone goes shopping and shopping without money can not, Cryptocurrency is potential money, so pay that trade. This too is a fairly predictable point and a rather natural phenomenon. In other words: nothing to worry about.
The emergence of regulations around Crypto
There will always be some people who spoil the whole game for the crowd. This is also the case with Cryptocurrency. It seems that there are so many houses sold in Asia because they want to invest in Cryptocurrency. A development that seems to be quite ridiculous at first, but now has far-reaching consequences. There is a list of governments that are busy regulating the entire market and this is sad that unfortunately and this list seems to be quite long in the short term.
There was no shortage, but we also see this as a result of improper behavior. People who approach the market and the phenomenon 'Cryptocurrency' from a responsible, mature attitude, who know how to act. People who only hear about the news, or hear others talk about it, will act like a chicken without a head. How the Crypto veterans handle this
It is fairly plausible that these seasoned experts are not bothered by this change. As you read above, they are not unnatural phenomena. It is not that an alien entity has suddenly claimed half of the market and has come to terms with it. The causes are all in line with expectations - at least with experts.
They know the change with some accuracy and they have not fallen off their seats when this phase actually made its appearance. Acting in or possessing Cryptocurrency is more than just participating in the hype. You need to understand the market and be constantly busy with news (or filtering it out of bullshit). If you have been doing this for all that time, then you did not fall apart when things started to plummet.
How the Crypto newbies survive this phase
This group of people will most probably already be in a circle around a petroleum lamp in their nuclear bunker. For them this looks like the end of the world. We can imagine that the persons who are virtually unaware, or not busy with their Cryptocurrency, experience this as a great shock. "Where is my money going?" Will be a common cry and these days.
It is a mountain of unnecessary stress that they get themselves on, because if you are a little more absorbed in all this, then you know that this is only temporary. Of course it is not that someone can make a fantastically accurate prediction about the progress of the market, but you could have seen this development. Panic is therefore logical, but you have that in your own hands.
On Monday, six major asset managers took it a step further by declaring not to invest in bitcoin and other crypto coins. This was a slap in the face of many bitcoin investors who had hoped that the price would take a huge turn if institutional investors were to report to the crypto circus. But they do not seem to want to do so until now.
Subsequently, Steven Maijoor, chairman of the European ESMA supervisor, also issued a warning. "Bitcoin investors should keep in mind that they can lose all their money," he told the Bloomberg news agency.
All these factors added up, probably caused some of the crypto investors to carefully convert their piece of computer code into real money. Chances are that the so-called bitcoin whales, a club of about 1,000 smart guys who hold 40 percent of the bitcoins, think the time is ripe for cashing.
Yet this does not necessarily mean that the cryptobubble will burst. Crypto courses are volatile and have seen strong corrections before. It may well be that.