A lot has been made of the Mt. Gox bitcoin selling and how that has sent crypto prices lower since December. That is admittedly a big part of it but i just wanted to touch on the negative feedback loop that reinforces the lower prices and keeps sending us lower.
Let's start with an assumption
Why does the price of anything go up? If you believe in supply and demand, when there's more demand for a good than there is supply, it's price will rise till a point that people aren't willing to pay more for it. It is now in equilibrium. During manias and panics, supply and demand fundamentals can get thrown out the window but over the long term, i think they explain prices rather well.
Facebook bans crypto ads
One of the best ways to get people interested in crypto was through online ads, especially Facebook in my opinion. Unlike word of mouth which has a limited (albeit more targeted) reach, with Facebook ads, you could truly reach the masses. So with Facebook banning crypto ads at the end of January, this has meant less new money entering the markets.
This to me is one big reason why we haven't been able to push through the $12,000 barrier on bitcoin. I've marked with an 'X' when the Facebook ban happened and you can see how it has provided resistance two more times.
Google to follow suit?
It's not comforting to hear that Google is planning to follow suit soon with their own purge of crypto ads. Looks like we're going to be headed lower. This consolidation phase isn't necessarily bad. It allows for weak hands to be flushed out, strong hands to remain. But don't count on any rocket moves up.
What would it take for the market to move up like it did back in November / December?
Personally, i'm looking for the crypto regulations to be put in place. It's unlikely that retail investors are going to be flocking in at these prices so the next best thing is institutional money. And that won't happen until they can get a clearer picture of what the regulations are. It doesn't look like that will happen anytime soon so i'm just HODL-ing on and buying cheap coins on dips. Fingers crossed