What is happening with Crypto right now?!?
I'm sure you are all painfully aware that Crypto prices have been in free-fall over the last day. Virtually everything is in the red. Bitcoin itself has dropped from about $14,300 to as low as $10,900 in the course of a mere 24 hours.
Like me, many of you have probably been wondering what is going on. Should you sell or should you hold? Well, I've done a bit of research this morning, and I think I've come up with the reason why this is happening.
If you look at the historical charts, you will see that the Crypto market experiences a similar crash every year around this time. Why is that? Well, we are currently about three weeks from the start of the Chinese New Year, also known as the Lunar New Year or Spring Festival. Believe it or not this is the largest holiday celebrated across the world by number of participants. The Chinese New Year is their Christmas, Thanksgiving, and New Year's all wrapped into one.
With the approaching New Year, Asian investors are pulling fiat out of the market en masse to cover travel expenses, gifts, etc. Never fear, though, this money will start returning to the market once the festivities have concluded.
So what's the best way to deal with the current market condition? Obviously, if I had been more experienced in the Crypto market, I would have seen this coming and moved my cryptocurrency into Tether, and then increase my positions in the coins I love by buying them up at the much cheaper price. This didn't happen... So now I'm left holding a bag of coins that are valued at almost half of what they were this time last week. I'm a firm believer in the concept that you haven't lost anything until you sell. This is where it is important to have a strong hand. I intend to weather the storm knowing that all the coins I'm holding are solid projects, and their value will return. In the meantime, I'm looking at this as a massive buying opportunity. My fiat will purchase quite a bit more this morning then it would have yesterday. This is the time for the Western markets to 'double down'.
In closing, I hope that this has helped shed some light on what is happening in the markets this morning, and has given you the insight needed to hold strong in this storm. If you've been on the fence about whether to make the plunge into Crypto, don't let this 'crash' scare you away, Millionaires are made by buying cheap and selling high.
If you are a newcomer to the Crypto space and need help getting started, please see these two previous blog posts.
https://steemit.com/bitcoin/@beastley/what-is-bitcoin-explained-so-even-your-parents-can-understand-it
https://steemit.com/bitcoin/@beastley/how-to-trade-digital-currency
I am not a financial advisor. This article is intended for educational purposes only. This is a highly volitile market. Never invest something you can't afford to lose.
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All very plausible and I agree - except that you forgot the part about rumours of a trading ban in South Korea - even Yahoo picked up on this:
https://finance.yahoo.com/news/bitcoin-slides-14-percent-crackdown-085904846.html
Yes they did, and it may be a contributing factor as well. I don't believe it will happen, though. Crypto is huge in S. Korea. Koreans have more money in Crypto then in their own stock market. The S. Korean government would be foolish to ban it. Instead, they will do the same thing most governments will do. They will force exchanges to gather personal information identifying their clients and thus removing some of the anonymity from the space, and allowing the government to tax the gains.
Those investors who just react to headlines without giving it any critical thought were probably moved by the headlines about the possible S. Korean ban, but experienced investors have seen the same scenario play out before, and I don't think they are selling off in this volume based on the rumor.
That's just my opinion, though. I could be completely wrong.
Interesting theory. Happy trading.
Thank you. Same to ya!
The explanation is clear, but I'm afraid it's too simple, that something else still should be in the background... I hope I am wrong.
I hope you are too...
Regardless, I have faith in the future of Crypto and the coins I'm holding. So hodl and look to the long term.
I agree, I also have faith in them, but we cannot foresee, which has a real future. Maybe a new one arrives, and all old ones disappear.
Anything is possible in this market. All we can do is research the project and the team and place our bets from there.
"Bets", that's true. I really do not have objection against cryptos, but their volatility is a kind of gambling. You cannot predict the price. If you are interested in (and I am), you have to accept this fact. But actually, the stock market works the same. At least with cryptos you can earn more money. :-)
Very true... The Crypto market is very much like gambling.
Yeah, even with all this FUD and panic going on, at least for us HODLERS, we see this as a mayor buying opportunity to load up more on our favorite coins! :)
Yep... Everything is on sale!!