I'm sure you saw the price of Bitcoin (and all other cryptos, too) drop dramatically yesterday.
I'm here to tell you to hold on tight to your towel and DON'T PANIC.
In a previous posts I showed how in sync the top cryptocurrencies were yesterday.
I would think that this is profit taking by whales.
Traders who are heavily invested in cryptos sold everything they could while the price was at all-time-highs, and the market responds by dumping as quickly as possible.
Why you shouldn't panic-sell
There are too many seasoned investors.
So many people are long on Bitcoin that they are going to see this as a massive buying opportunity. So all the whales will take there profits while the medium- to small-sized investors are going to BTFD (buy the fucking dip).
This is not MtGox, and it never will be
Don't get caught up in this frenzy and panic-sell.
This drama isn't for you and you'll just lose money if you have a weak hand.
There are plenty of people who are looking at a hugely undervalued crypto market and are chomping at the bit to get more Bitcoin before the price bounces back up to $3k or higher in the next few weeks.
Have a strong hand and tell me what you think
What are your theories on what's happening?
Do you concur with what I've said or do you think there's a better explanation?
Tell me in the comments below :D
I like the sentiment.
I disagree with your statement that there will never be another Mt. Gox. There is always the possibility for these pseudo-legal, centeralized exchanges to become insolvent or be hacked.
I think there is very much a possibility for a Mt. Gox scale market correction. Although with many more exchanges in the business at this point - that is very unlikely.
Yes, I agree. That's kind of my point -- there are too many exchanges and too many buyers waiting to catch the next dip for things to crash as hard as it did with MtGox.
Thanks for your views!
Somehow I still have a feeling that a mt gox correction is possible :-/
Exactly. When the "Mt. Gox event" occured, the exchange conducted 70% of ALL bitcoin transactions. That is unheard of now. While another event like this one is possible, it's very improbable.
You're right on the mark here. There will always be corrections. Corrections are healthy and much needed. This is how a "true" free market operates to find value.
Right! :D
No market can sustain an uptrend like the one Bitcoin's been on. This is a completely normal and natural event. When everyone is a buyer eventually someone bails and that's all it takes for the selling frenzy to start.
Taking profits is a good thing. It resets the market and allows it to find fair value and uncover new buyers. We need to know what the bottom looks like before going higher again later.
Sure it can. You just aren't exposed to such opportunities very often. Think buying Apple stock decades ago.
@Kyle.anderson I'm talking about the short term. Apple took 15 years to build its market cap and there were plenty of 20-50% corrections along the way. Markets that go vertical, up or down, are not sustainable. They bottom/top then correct, build a new base and, if the fundamentals are there, continue the trend.
Bitcoin is in a massive bull trend. But, it got way ahead of itself this week. That is all.
I can vibe with that! I agree that without a scaling solution, BTC is overvalued.
Yeah, I was waiting for the correction. I expected it at around 2.5, but then it just kept going. Made me nervous lol.
What's happening right now is natural, like you said.
Crypto still has a small market cap compared to other investment assets, so these sorts of moves can have a big impact.
Thanks for your comment. :D
true -- and prices haven't fallen that dramatically after all; rather, they are holding more or less steady at some lower support levels. It should be obvious that the market needs a breather after the kind of price surges seen during the last few weeks. It has already, rightly, been said elsewhere that that entire "massive correction" is nothing more than a consolidation at 1-week lows (that's last week's price levels; oooh, big deal) -- nothing to freak out about!
Right. This shouldn't be considered a big deal. I was expecting it to happen. I mean, there's no way it can just keep going up in a free market. Expect volatility.
Question: if a whale powers down at a high steem or btc level (and it subsequently dives in price), does that lock in their payouts at that level relative to steem value the day they powered down? I think I might just be confounding my own thoughts lol
I really don't know.
If anyone has an answer to this I'd like to know too.
I'm not sure who posted this on Steemit, but they were pointing out that so many of the cryptos had to be converted to Bitcoin in order to cash out after the upswing. This increased investment into Bitcoin prior to cashing out would cause a false high as well. I thought it was a great point and one I had not thought of.
Yes, it's something I've talked about sigh @bitcoinmeister
Since Bitcoin is the most liquid crypto right now, people move to it to claim their profits.
Exactly!
This was a "profit-taking" i.e correction.
It is and will always happen when an asset rally too much too fast,
One could say its the normal.
And it's also a good sign, just as you say.. Its also a way to shake off weak hands,
This is a sign that BTC will go up even further.
So sit tight, the rally will soon start again.
Ps. The death of all FIAT currency is a FACT!
.. And money must always go (stay) somewhere .. The safest place.
Connect the dots. .........
I sure hope fiat dies...
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it was due for a correction. Anyone can see that. The world is still as confused as before. Nothing has changed.
lol