Another week, another dip for bitcoin.
In the last 24 hours bitcoin has dropped about $1500, and it has dropped about $2500 from it's highs of a few days ago.
This is coming on the heels of relief rally that saw the coin get near $12,800 after it's plunge all way down near $9,000 just a week ago.
(Source: https://www.coinbase.com/dashboard)
What is causing the drop?
It isn't entirely clear what is causing the drop, like is often the case with cryptocurrency price swings.
However, there are some likely potential possibilities that are contributing to the weakness...
For one, an analyst went on CNBC and claimed that he thinks bitcoin is going to lose 90% of it's value from current levels, this year.
He is calling for a drop down to $1,000-$3,000 by the end of this year.
Then of course every major news outlet is running with that headline which is only spreading fear among an alreadly visibly shaken investor base.
Then you have South Korea announcing that they will be taxing cryptocurrency exchanges.
Which shouldn't be that big of news by itself, because any company that is earning money has to pay taxes, but perhaps some of these exchanges are needing to lighten up their crypto inventories in order to spring for the cash needed to pay these taxes?
That is something that wouldn't surprise me one bit and something that is probably happening.
(Source: https://www.investors.com/news/bitcoin-renews-sell-off-as-south-korea-clamps-down/)
Another point to consider is the seasonality aspect.
I wrote a post on the seasonality aspect a few days back, it can be seen here:
Basically it underscores how the middle of the January has traditionally been a very weak point over the past 4 years, and then how the beginning of the year overall has been a weak point compared to the rest of the year.
That is not a lot of data to go off of, but it's enough to see a trend.
My thoughts:
I think overall, we are just in a very weak point in terms of seasonality, in terms of the price running up so much so fast, and the news turning decidedly bearish over the past few weeks, that it will be hard to gain any kind of upward momentum in the short term.
Given that environment, it doesn't take much to cause already jittery investors to hit the sell button.
However, I think a few weeks from now, perhaps a few months, prices will be higher than where we are today, across the board.
Stay informed my friends.
*Image courtesy of pixabay.com
Follow me: @jrcornel
Might have to hang out on the sidelines until we get more confirmation of up movement or down movement. Looks like it could go either way at this point. Some people are saying BTC could drop to mid $8000's. If it went that low, I would definitely load up.
I take it as a routine task of bitcoin.It has been doing it since ages lol
Just relax and HODL.
Yes, I agree with some points which you have mentioned, definitely they are playing some role in the decrease of bitcoin's price.
Great explanation of the different reasons. I've written about this myself from a technical analysis point of view. Please check out my other posts. Just recently posted my prediction on Stellar Lumens (XLM):
https://steemit.com/cryptocurrency/@benkalashnikov/stellar-lumens-xlm-analysis-80-potential-profit
I hope you are right
wouldnt that be nice
The main idea is to collect as many bitcoins possible as in the near future the block reward is expected to be halved. While steam might be a good platform there are many others ways to stay well ahead in the crypto race . I shall be covering all crypocurunncices and the easiest ways to buy them. Thank you for your support. Have a blessed day!
Yeah, I mean it cannot go up forever.. Needs to have corrections.
https://steemit.com/bitcoin/@crypto-king-pak/an-article-about-the-birth-of-the-four-most-popular-virtual-currency-cryptocurrency-or-digital-currency
just patience and hold... every january same story
Looks like a trend to me!
That's great! Thanks for the perspective!
Ahah indeed a matter of perspective
Great ! HODL
And every year this causes the weak hands to panic sell, making the dip worst. I remember panicking on a dip in 2013 and selling out all my BTC. Every last one of them, like an idiot.
Needless to say, I learned. Got back in, and didn't panic sell at any of the following dips or crashes. This feels pretty normal to me now, but it's always sad to see the people who can't handle it. I agree with @jrcornel, I expect BTC and most of the crypto market to be up within a few weeks.
2013???? You are like a dianosue to me. I got into bitcion fairly recently
Yeah I'm still out of Bitcoin ;D
Looking for babies like Salt, Komodo and Enigma to invest.
All of those are great coins to hold! I personally also have Enigma and Salt! :)
The main thing is it gives me perspective when I see the market acting crazy. Yeah it's much bigger now than it was but it's not like the Bitcoin market has never been crazy, you know?
Formal education will make you a living , self education will make you a fortune.
I sold 5 BTC back in 2015 so I could buy a new keyboard.
This is my first January as a crypto investor, so it’s interesting to see the new year trends!
Is there a possibility for bitcoin to go to 0 ?
no, because 0 would mean its free, and everyone would want it if its free, so the price would go up.
I understand what you mean now , thank you for helping .
Yes! My Bitcoin is 0
Just hold lol
Ahah indeed a matter of perspective
Just FUD everywhere.
I personaly HODL EOS. yep. it is good.
Indeed
Fantastic graph
I dont think the chinese watch cnbc and their analysts from the world of the last century
well said!
it's a hardtime for crypto... hope will end soon
The mainstream does a great job at spreading fear! I saw an article similar to that, but was only 8-10 sentences long. It was laughable that they put that on credible news sites.
I think we will see weakness for a little while longer, but don't think $1,000 or even $3,000 is in play this year.
I could see $6,000 - $8,000 though
Agreed. I don't think those numbers ($1k-$3k) are in play unless there is some fundamental change in the current environment, which there very well could be. If things stay roughly the way they are, I don't see much below $8k to be honest, though I usually tend to be overly optimistic. ;)
I am the same way! I think it is human nature to be optimistic. Unless a new technology replaces blockchain here soon..
LOL @ "credible news sites"
There is not such thing these days. Every so-called news organization is a propaganda outlet with an agenda these days. Just look at the FUD that Bloomberg has been putting out when it comes to cryptos. Bloomberg should be renamed to FUDberg.
That was the kicker! :D
I found it: it is quite funny actually!
https://www.marketwatch.com/story/bitcoin-could-fall-off-cliff-drop-90-one-wall-street-strategist-warns-2018-01-21
And what they're saying is there is no demand... at all.. below the current point to match the desire to sell.
That requires some serious mental gymnastics.
Great article, @jrcornel. I hadn't considered the SK sell-off to pay taxes.
Yes sir. Strap in for a wild ride.
I’m debating on pulling out my money now and buying in at the bottom. Ive seen a lot of suggestions that it could get to $7000. We will see though. The fast run ups always cause steep drops
You are correct about that! It never hurts to take some profits at the table
Very helpful analysis, calm and optimistic but cautious. That echoes my sentiment very closely. I am not selling anything.
Good luck everyone.
hold
Is it possible it’s got anything to do with the lock down with the America government? Cheers mike
Let’s hope it is just seasonal. Thanks for cloning my blog about the CNBC pundit expecting a 90% drop. I think he is an idiot.
OH NO! I just bought more :(
Thanks for composing an informative post that helps investors gain some perspective surrounding current Bitcoin fluctuations. I think the fact that there was a massive surge in mainstream attention and interest in Bitcoin and Cryptocurrencies in general late last year brought with it many new, and quite naive, pseudo investors who felt that Bitcoin would rise perpetually. It didn’t and as a result scared money pressed the exit button which I think we will still see throughout the next few months at least.
Given this, I think what is important for everyone to remember is the underlying principles embedded in Bitcoin and Cryptocurrencies and what role they will play in the future. If you truly believe in it’s innovation then don’t worry about drips in it’s price as it will eventually rise once again. In fact, I would suggest that the majority of us should rejoice when the price falls as it illustrates a phase of greater investment opportunities for future growth.
It might be having some selling pressure since Indian banks are cutting off exchanges...in the end, over any years, there will be more buyers than sellers
the history repeats itself, this is the right time to buy some !
Just buy EOS!
It never stopped falling, just charts painted to look like it had. still looking for the bottom.
Finding a bottom is difficult. Especially with something like BTC that is so volatile. But what does work and is a proven investment strategy is to dollar-cost-average.
Bro! just smoke a good weed, relax and hold
lol
yes also it badly effect steem
The simple answer is that all crypto are in a massive bubble. All bubbles burst, it is never different.
Once the correction runs its course (BTC below $8000, possible $6000), it will be time to begin the buy-in process.
Be patient and you will be rewarded.
Pretty sound advice.
January seems to be the month of government regulations, I'm just happy to keep buying and slowly grow my portfolio at a cheap price !
the safest thing (as always) would be to hold right now, the market can only grow in 2018 with big companies getting into the game and actually building things with/around crypto currencies!
Agreed @thunderdraws, also welcome to Steemit, looking forward to seeing your intro post ;)
Great write up and I agree. I think that previous run up is over and many people are taking profits on top of the exchanges cashing in. There is always FUD when markets tank, so the CNBC guy saying BTC will drop to $1,000 falls into that category, but it's not outside the realm of possiblity I suppose. However, it's highly unlikely and that guy was likely biased against cryptos like many on Wall Street.
What sucks is BTC is driving down the entire market. I don't think ALL of these cryptos would still be going down were it not for Bitcoin. That's a serious problem in this space and effectively means you can't safely invest in any crypto without having to worry about BTC driving down your company's price value. That doesn't even happen in penny stocks, though I know we're talking about completely different assets here.
Bitcoin hasn't stabilized yet either, so we don't know how low it'll go. I'm a long-term hodler, so I watch the weekly charts too and it's important to note that on the RSI over the past year, BTC has never dropped below 50. Since January of 2016, 2 years, Bitcoin has stayed above 50 RSI. It's now coming really close to breaking it. If it does, that's not a great sign but doesn't mean it won't turn back up because it's getting close to being oversold on the daily chart.
Over the past 2 years, when the market got this oversold...it rebounded hard. We'll have to wait for that to happen.
el futuro
I think the $17,000 hike correlated directly to the media frenzy which has started to tail off a bit.
Although BTC has it's problems and may not be the forerunner in the long term in Cryptocurrencies, I do think that the result of bringing it to the mainstream via media outlets - is that it is ingrained in the psyche that cryptocurrency is the real deal for the future of currency. Hence we will see an increasing no of financial instruments related to BTC and further Financial Institutional investing. So I think based on common sense - although the $17k price was driven by media hype and little substance - the substance of the value of the currency will increase in the short-medium turn and with that - more stability.
The technological developments are causing a ripple effect across the sector. Bitcoin is reflecting a new reality of integrating this technology (Lightning Network), transaction costs falling out, block size improving....so many things.
The poor quality of information (signal-to-noise) and lack of true understanding how Bitcoin operates over time in addition to its true nature (It is not a stock) leads people to make hasty choices, in regards to entering and also what the perceive as risk exposure, making an exit.
Of course everyone's condition is different and i'm not telling people what they should do but I feel that too many people are not well enough informed and listen to talking heads that have ABSOLUTELY no idea what they are talking about or worse, are definitely leading people toward bad decisions.
It makes sense that its dropping, there are just better coins out there at a cheaper price. Why would anyone want to pay 25 bucks to transfer 100 bucks that would take hours to transfer? I look at Bitcoin as Myspace, something better will come along and take over the thrown aka Facebook, its just how evolution works.
I think I agree with you on this.
You might be right that bitcoin and blockchain will be replaced eventually with something faster. But on the other hand, what if this is similar to the VHS tape versus Beta tape battle. That raged for years until VHS won. Yet, those who purchased Beta machines were happy too. BTC stands to win as a dominant player in the cryptocurrency space.
blockchain is here to stay, its just bitcoin im starting to fall out of love with. unless bitcoin figures out a way other than the LN I see it falling.
From my understanding the way that LN works is that there are two sides both sides have to open up a private channel and send bitcoins back and forth (outside of the blockchain), in order to open the channel, one or both have to deposite bitcoins into a special bitcoin address. From there they can have as many transactions as they want inside the channel until either party decides to close it which the final balences will be paid out.
But lets say you want to add an additional person to the channel say 3 people, with the middle guy connected to both sides of the table.
Then the person on the left could indirectly send money to the person on the right: the middle guy would first have to pay the left side and then the right side would have to reimburse the middle to reverse the transaction.
It all just seems like a mess and Idk if it will be there scaling solution that everyone is dreaming off.
Well, there is hashgraph as a possible contender to blockchain. I think that now that there is so much focus on blockchain, there will definitely be computer scientists trying to come up with something better, faster, and more reliable than blockchain. But, there is also the problem of getting it widely adopted, which is more of a marketing problem, and not a computer science problem.
I guess it's some kind of correction. The same goes with etherum
It's the time again..
A hype can only last so long...
Really helpful!!
It's not always that some news or events are causing the drops.
Sometimes it's a natural cycle and we are experiencing a correction now. Have a deep breath, take a look at technical analysis and relax. Here is a good example: https://www.tradingview.com/chart/BTCUSD/KRIcrA27-Bitcoin-USD-Buy-in-Re-buy-Levels-End-of-Correctoin-Altcoins/
Dips are as good as tops. Just use the moment wisely. Relax and have another good day ;)
What are your thoughts on USDT or tether propping up Bitcoin? Fact or fiction?
Bitcoins and all altcoins going down is part of the script and trend.
After some months, it will go high again. This dip is the opportunity for a newcomer like me and many others to get into the business. I hope it to $1000-$3000 like you said and I can finally start investing.
Definitely agree, there is a lot of fear-mongering out there and a lot of people investing in bitcoin who have never really held an investment through a dip or a series of dips, so they panic and sell at every opportunity. If you are a seasoned investor and see long term value in the crypto space then a dip , or multiple dips will not bother you. it is just like stock market investing, except it plays out about 100x faster from peaks to troughs! January is often a bad month, but maybe not enough January's have past to make that a firm judgement yet, however I can't see it dipping lower this year than the lows we have seen this last few weeks. This is because there are some real technologies out there linked to the altcoins in particular plus ether and litecoin with some genuine usefulness and value, some of the tech is very exciting and the coins go alongside that. When people say it has no intrinsic value, they may be partially correct for bitcoin, but not for a lot of other great projects and coins. there is a hell of a lot of cash sitting on the sides all over the world right now, people have divested stocks and shares because that market is so overvalued it is a joke, and interest rates are so low in the US and UK that no one is particularly attached to their cash in the bank earning nothing..... so once the stock market dips and once the crypto space smartens its act up a bit, less hacking, more security, more reliable and faster transfers of coins, easier to access cash on exchanges, easier to swap back to fiat etc... then I think we will see the mother of all inflows into crypto in 2018 at some point.... watch this space.... and until then, stop checking your coins and HODL.
#HODL tight and #BuyTheDip!
Interesting post ! Thanks !
Its important to hold during this drop. Itll be a great buying opporutnity at a lower price then a flood of buyers coming into the market can help it get back to a new all time high in price.
I feel
The year 2018 Clear out
All cryptocurrency scams and
Bitcoin become much more
Stronger than ever!
Bitcoin is born and Brought up in FIRE
So, No affect with a sunray!
Although investment is high risky.
now bitcoin is the popular on the streem
it is a process to transfar money
thanks for sharing
It’s likely the Wall Street fellows who are saying it’s going to fail, pumping and dumping to cause panic. That’s just my 2 cents, though.
Just people's histarical nature. Its below what they bought in for so they dump it out of fear of loosing it all instead of riding it out.
Pretty simple eh? Perhaps my post should have been much shorter?! ;)
I agree. Do not have "weak hand" and hold. For the brave one, this might be a buying opportunity.
i do not know the reason.but its dropping.informational news
upvoted
Amazing post
What you are saying could be a contribution for these constant dips, This period of every year since 2014 has always had dips and rise always came after. This time those could be some of the reasons. But as usual we a shall experience a rise like it has played out.
it affects almost all altcoins when bitcoin prices is changing. many people will try to bring bitcoin down but i doubt they'll succeed. #HODL
Good analysis, crypto is still a very small and thin market, hence the price swings. As more and more investors are realizing that crypto is the future, these price swings will become slower and slower over time. Bitcoin is the future :)