There are a number of possibilities why the market crashed in January, I looked back on the bitcoin charts for January from 2015-2018, and amazingly this has happened non-stop but here are some of the reasons I think played a part in influencing this plummet:
- From the historical charts for bitcoin, a huge drop is a trend at this time of the year, check out these charts, I got from www.coinmarketcap.com
• So I guess I can rule in the possibility that this is probably a trading strategy from the whales?
• Or traders just following historical patterns, and know when to SELL!!
• Could it also be the fact that a couple exchanges banned new members from signing up, then a week later, opened the doors for the newbie's and few days after that, the market cap just falls from 750 billion to 420 billion in four days, even though tons of persons poured some more cash in the market which should increase the cap but didn't. hmm, what to think????
- End of the tax year
So investors are planning to pay their annual taxes, and this has to be done in FIAT, not crypto.
- Noobie and the "panic sell syndrome"
So let me tell you a story about a noob trader I knew very well. It all started out when he first used bitcoin to accept payment for his services in 2016 and was amazed that he could get the money digitally apart from using paypal, skrill and other E-wallets. So then he researched the technology about this so called "blockchain" and it sounded like Gibberish of course, but because he was surprised as to how getting his money could be so seamless, he decided that this technology was the future. This led him to go on to even more cryptocurrency and signed up for his first exchange "Poloniex", and saw the fluctuation of how these prices go up and down non-stop and saw an opportunity that could possible become a huge income for him in the future. So of course he threw his 9 to 5 cash in and started trading, but then a huge sell off on bitcoin happened 2 weeks later, and umm yea, the "panic sell syndrome" kicked in, and I'm sure you know what he did huh? Yup he sold all that shit at a huge loss thinking bitcoin was gonna die and tried to save himself by selling off his bitcoin being the noob he is. Now after thinking he at least got to save a little money before he lost it all, 9 days later bitcoin rose to twice the value he bought it for. And then he became a believer.
So yea guys, that is actually a story about me. So noobies, don't panic and sell.