Look at the bigger picture rather putting the blame on cryptocurrencies
Image source: coinmarketcap
Over the past few days, we have seen Bitcoin prices dropped below the $6000 mark, a safety point many analysts call it. This has definitely rumbled the firm ground for some crypto HODLers, creating anxiety and negative sentiment over media.
As reported by Bloomberg, Bitcoin's price at $5500 marks a one-year low from the lowest point of $6200 back in Feb 2018 right after the highest peak at Dec 2017.
“The market is trying to find the bottom. People who are chartists look at historical patterns, and they note there’s one last final capitulation drop to get the last people fleeing out of the market.” said Michael Terpin, a San Juan, Puerto Rico-based partner at Alphabit Fund.
Source: Bloomberg
True to every single word, Terpin conveys what is happening exactly for Bitcoin at this moment. Bitcoin's drop is not related to the fork of Bitcoin Cash as the global cryptocurrency market remains stable.The argument in Bloomberg's article points to us other five occasions where Bitcoin hit the $6000 support level, "only to see buying return and prices come roaring back".
Source: Google Finance
However, it would have been no surprise for financial market corrections as we have witnessed several drops in the past month. In the past month, the S&P 500 Index plummet approximately 300 points, down from 2923 on 3rd Oct 2018 to 2641 on 29th Oct 2018.
No doubt, speaking of the 10-year run since the financial crisis in 2008, stock markets are currently facing greater challenges from new sources. Paul Tudor Jones, a hedge-fund luminary, spoke during his talk in Greenwich with regards to overvalued bonds and stocks "that had been underpinned by easy-money policies from central banks across the global". Source: marketwatch.
Image source: https://goldprice.org/
Oil prices were also slashed by 25 percent since early October 2018, as reported on CNBC, however no concrete reasons were stated but the article did note of US sanctions on Iran while Saudi Arabia requested global supply cuts.
Gold prices also hit a near 2-year low, falling to $1200 per ounce as CNBC cited a stronger dollar, "boosted by the Federal Reserve's hawkish interest rate policy and political uncertainty in Europe".
Zooming out to look at the global phenomenon seems like the right thing to do. The crypto market is a small portion of the entire financial market and 'whales' exists outside Bitcoin. We should also debunk articles written on baseless grounds such as what is blabbered by Benoit Coeure calling Bitcoin "evil spawn of the financial crisis" Source: financemagnates.
It is always good to learn to be a discerning reader, and writer on my part. Have a great weekend. :)