Interesting start for February, the second month of 2018. Only 8 top 100 cryptocurrencies by market capitalization are operating negatively. But what is going on with the market? The last year we had an incredible rise in cryptocurrency prices and the market capitalization was headed towards $1 trillion dollars. At the moment of writing this article the total cryptocurrency market cap is $475 billion dollars.
Let’s have a look at the possible causes of this dip and how most of the cryptocurrencies are performing.
Bitcoin. It is losing 8 percent in the last 24 hours. Depending on the exchange each Bitcoin can be purchased between $9,200 and $9,400 dollars. The last time that Bitcoin was traded between these prices was the last November the 26th.
But the market is different today. Some days after the 26th November, the price of Bitcoin reached a new all time high at $10,000 dollars. Bitcoin kept this upward trend, and reached $20,000 dollars in December. Since it reached this price, this cryptocurrency couldn’t come back to previous levels.
It is a problem for Bitcoin not to reach levels seen before. Several individuals have placed big amounts of money in the market. Indeed, some of them have even paid fees in order to invest their retirement savings in the cryptocurrency market. Others have decided to take loans when the market was near $20,000 dollars.
The cryptocurrency market is a volatile one, one day goes all the way up, and the next day it goes down. Most technical analysis is not able to predict possible movements of the cryptocurrency market. Why? Because is really influenced by psychological facts.
Let’s have a look at the FUD that has been spreading during the last days.
India Possible Ban on Cryptocurrencies = FUD
Different news sources have been reporting that the Indian government was thinking about banning Bitcoin and cryptocurrencies. But lets quote what the finance minister Arun Jaitley commented:
“The Government does not consider cryptocurrencies legal tender or coin and will take measures to eliminate use of these crypto-assets in financing legitimate activities or as part of the payment system. The government will explore use of blockchain technology proactively for ushering in digital economy.”
Clearly there is no information about a possible ban or about tight regulations to the market. Indeed, what India is planning to do may be good for the cryptocurrency ecosystem. Illegal activities should be controlled, in any single market. What would allow important investors to trust the crypto market? Clear rules, regulations and an integration with the real economy.
Bitfinex and Tether Subpoenaed by CFTC
The cryptocurrency exchange Bitfinex and the cryptocurrency Tether have been subpoenaed by the U.S. Commodity Futures Trading Commision (CFTC) on December the 6th. That’s right, December the 6th, before Bitcoin hitting its all time high.
The media was using this information in order to spread more FUD in the markets. It has created a fear among investors and the market is down around 20% in the last 7 days.
Bitfinex and Tether must give the correct explanation to the authorities about the funds, as most of the cryptocurrency exchanges do. It is important for individuals to understand that as the media pushed the cryptocurrency market to new levels, it can also move it down.
There is no reason to be worried about. Different developer teams are working hardly in releasing as soon as possible the Lightning Network. This would allow Bitcoin to efficiently scale, reduce transaction fees and processing times. These will be real news for the cryptocurrency world. Every cryptocurrency enthusiast should be waiting for it. At the same time, it is important to avoid news that aim to generate selling pressure.
Image Courtesy of Pixabay
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