Markets have been seeing red for some time now, however, Bitcoin had largely been mostly immune, until today.
Today Bitcoin fell below the $2,000 level for the first time in almost 2 months, 49 days to be exact.
The entire market value of the crypto space has fallen by almost 39% from the highs of around $115 billion in June down to $71 billion today.
This is the lowest total market cap for the space since May.
Basically we are seeing a correction of massive proportions.
What is going on?
Concern over the recent price action:
When polled, analysts that cover the space stated that the charts and momentum were showing something like this was coming for Bitcoin for some time now. The entire space has been drifting lower over the past couple weeks with Bitcoin sliding the least amount. Today, Bitcoin finally joined the party.
Market fatigue:
This was also mentioned as a possible cause by those same analysts. Whenever you have a market that has run up as quickly and as far as the crypto space has over the past couple months, it is due for some kind of correction at some point. When the buyers run out there is no one left to keep the run going, and then profit taking takes over.
The elephant in the room:
The above reasons are pretty generic and they certainly are possible causes for what is going on, but the main reason likely has to do with one thing...
August 1st.
A date that Bitcoin traders and investors know quite well.
That is the day we will find out if Bitcoin splits into 2 chains, 3 chains, or stays pretty much the same. The fact that it is completely unknown what might happen has traders and investors not wanting to hold Bitcoin through that date.
According to the founder of cryptocurrency exchange "The Rock Trading", Andrea Medri, it's exactly that:
"The selling could be due to people not being comfortable holding bitcoin because of the August 1st due date."
In fact some exchanges are even saying they won't process any Bitcoin transactions up to 2 days before August 1st because of the uncertainty over what might happen. Who wants to sit in something they are holding massive gains in through something like that?
Any time you have uncertainty, investors and traders tend to take chips (or coins) off the table.
(However, given all of that, where do you think we are on this chart?)
My thoughts:
I fully expect things to continue to be choppy up until that date with a downward bias. However, once we get passed August 1st and the world doesn't end, or something completely unexpected doesn't happen, I fully expect the entire space to rebound in a big way.
Which means...
I think we will see much higher prices than this for all 3 later this year.
Stay safe my friends!
Sources:
http://www.coindesk.com/bitcoin-price-drops-near-2000-crypto-markets-fall-toward-70-billion/
Image Sources:
http://www.cnbc.com/2017/05/25/bitcoin-surges-10-percent-to-all-time-high-above-2700.html
https://coinmarketcap.com/
http://www.coindesk.com/bitcoin-price-drops-near-2000-crypto-markets-fall-toward-70-billion/