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RE: CRITICAL POINT - Crypto Bounce (UP) or Correction
More than a week ago a drastic price drop happened. There was no specific information in the crypto news sites about the possible reasons for that. The situation now is the same.
Essentially what is happening is that an ICO is made (Initial Coin Offering), and then the money from the ICO is converted into Bitcoin and Fiat. After that, the Bitcoin is sold, and the fiat concerned in all cases is banked.
This produces downwards pressure on the cryptocurrency ecosystem, and as a result, the net worth of the market drops. The market itself can recover, but only with the influx of new captial, which is typically coming from ICOs. Expect more of the same while ICOs are appearing like flies.
Well, it means then that the expected rise of BTC price is postponed for the unknown future, doesn't it? (if ever happens, of course)
The ICO cycle is dependent on both human psychology and the availability of VCs, which are in limited supply. Ultimately the ICO system fails when not enough investors are putting their money in, and this is typically produced by an external factor that affects the overall market.
At the moment the major factor that will affect the Ethereum price will be the instability in the Bitcoin ecosystem over the next few months, due to the BIP148 vs Segwit2X situation. It largely depends on how many mining groups show themselves to be untrustworthy, and that is a simple matter of watching. The prudent investor will simply hold during this turbulent time.
Could you explain what does VC mean, please?
VC is short form for Venture Capitalist: http://www.investopedia.com/terms/v/venturecapitalist.asp
I guess these are the so-called crypto whales :)