Bitcoin and its throng of altcoins are wearing red again for the second time since the January bleed. Having barely recovered from the last bear run, the crypomarket made mild gains before resuming a stunning value bleed that saw Bitcoin drop to below $9,000. A position it last held two months ago, when it leaped through the milestone, in the run-up to a spectacular rally that saw it making a bid for the $20,000 mark.
In the past month, the total crypto market cap has tanked from over $800 billion to just over $400 billion. Ethereum has gone from defying resistance levels in a climb to the $2,000 to a fall below the $1,000 mark. Why is this happening? Will the crypto market continue to shed value?
Well, there’s India’s Finance Minister Arun Jaitley vowing to “eliminate” the use of digital currencies for payment purposes” after stating that the Indian government doesn’t consider Bitcoin, or other digital currencies for that matter, to be legal tender. Jaitley’s statements had such an impact that news of South Korea stating it would not ban crypto exchanges did nothing to stem the bleed.
Market dips are rarely ever caused by a single reason, the second postulation I put forward is the whisperings that have been circulating, claiming that crypto has reached its peak. After the thundering rallies of December 2017, fuelled by an influx of new users to the crypto universe, incumbent investors simply took profit and which in turn spooked the new users and, well, here we are.
News that Tether has been challenged by authorities, to prove it’s claims of being 100% backed by the US dollar hasn’t done the Bitcoin Price Index many favors either. With Global icons like Katy Perry and Mariah Carey being paid to promote cryptocurrency services, along with growing regulatory clarity in mind. There is little reason to doubt that there will be a recovery as interest in digital money continues to blossom.
Bitcoin pundits, are barely concerned by the current bear run and expected such a dramatic drop to follow the unprecedented rally of December 2017. For the seasoned trader, such drops in value simply represent a buying opportunity.
What is your price prediction for the end of February? Let us know in the comments.