Hello everyone. First I want to point out that this is just my opinion and not by any means trading advice.
I have work with several cryptocurrency projects in the past and I want to provide my opinion on what we are currently seeing in the market.
I will be using data from coinmarketcap.
We all agree that January was a very difficult time in crypto, the market was extremely unpredictable, Fear, Uncertainty and Doubt was king, and those who were new to cryptocurrencies panicked and sold and had big losses, and I don't blame them. Here is a screenshot of top and bottom 5 on coinmarketcap on January 17th, 2018.
Top and bottom of the top 100 cryptos.
As you can see, every crypto went up and down accordingly and in unison, its like it almost didn't matter what were you holding, you will be at the mercy of the market and your portfolio would go up and down relative to everything else. You can argue that some cryptos had gains or losses more than others, but the trend is pretty clear and it kept happening all the way until around the first week of february.
The big shift
Now over the past few days, we have seen how the market is recovering and performing great overall, the Crypto Market Cap is currently sitting at around $510,255,518,433 at the time of this writing, and even though many cryptos are making some healthy gains, the market is not reacting in unison as before. Here are the top/bottom 10 (of the top 100) in coinmarket cap, and we can see that each one is performing independently.
Top and bottom 10
Why is this happening?
Less about the hype and more about the actual use of different cryptos - Back in november/december we saw unreal gains, adoption went through the roof and the Market Cap flirted with the trillion dollar mark. But it was largely due to speculation, hype and people with fear of missing out. The forums were chaos, people were just "buying and diversifying" so they were investing large amounts of money and spreading it among every possible crypto they could get their hands on, which is why we saw everything rising and falling in unison. However, those of us who've been in crypto for a while, are still VERY in the positive when compared to last year when you could get a handful of Litecoins for example for 3-4 dollars each.
People got burned, BAD, and now they are coming back, but they are being more careful, they read the whitepapers, they study the market and find coins they BELIEVE IN. This is an important thing to consider when getting into cryptos. BELIEVE in the coin that you are supporting. What is their purpose? What problem are they going to solve? Do they have a working product? Is it just smokes and mirrors? Everyone coming back and investing is doing so with more experience and more caution which is a good thing, we don't need more people getting scammed.
Those who played the "HODL" (I hate the word HODL by the way) game and held through the storm are equally cautious and have used the new found knowledge to move their cryptos from those who might not have a real use-case or with uncertain future, and moving to more established and promising projects.
It will happen again, so be careful and don't panic.
Everyone wants to make money, and in my opinion, with this bullish market that we are going to see for the foreseeable future we are not going to have a lot of people jumping in immediately, but there will definitely be a lot of eyes on the crypto market, and when things start to pick up again, the floodgates will open and the lurkers will start pumping money into the market again creating a positive feedback loop that will lead to another "crash" when inexperienced hands start playing the "daytrader" game and get burned. It always happens, it always has, and it will always happen. But as long as every "crash" is like this one, where we are still a gazillion percent in profits when compared to a year ago, I'm cool with it.
What are we seeing in 2018? Whats the future?
It will take more than just forking a coin and name it something catchy in 2018 to make a "successful" project. People are learning and getting smarter, and that is a good thing, hopefully we will se a combination of consolidation of good coins, tokens, DApps, and other crypto related projects, and those who are worthless that serve no purpose will slowly go back to the shadows where they came from.
I hope you like my write up, it is the first time I post a piece like this anywhere on the internet, so your replies and feedback is extremely welcome. Have a wonderful day.