The market crashes – what now?
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Bitcoin has fallen now since the all-time high by more than 70% and also the market capital endured a fall by 65%. Now comes the big winter and what should you do?
A column by Dr. Philipp Giese
the last months have been very frustrating for younger Bitcoin investors. A decline of over 60%, in the case of Bitcoin even at 70% and in the case of over 80% ripple leaves many questions whether this is the end of the Kryptowährungen.
The reasons are as numerous as well known:
- in the media, pretty much every business expert, which is set against Bitcoin was asked opinion to a .
- The Chinese increasingly to regulation is gripped to the and other markets or the lock on the credit cards understandably likewise leads to an uncertainty such as the recent advertising ban on Facebook.
- Many people have invested carefree in the last year, partly with money which they did not have – now the Treasury wants to have its share of of profits.
- Concerns about tether culminated in rumours of market manipulation of the Bitcoin price so that many in the current price development was market manipulation by Bitfinex (notwithstanding that on more exchanges bit coin) is buyable as only on Bitfinex).
- The futures on the CBoE and the CME as possible causes of a falling price of Bitcoin were often mentioned. Even if to emphasize here is that the futures-related trading volume is too low for a sustainable course correction of the psychological effect should be noted.
- Smaller technical reasons such as dramatically high transaction fees of Bitcoins and the infighting between Bitcoin cash and Bitcoin play a role here.
Finally, and I think that is the main reason many have discovered in the last quarter of the Kryptowährungen itself. Their profits, have plummeted since the all-time high by more than 90% if they had invested in TRON. Related is also an exaggerated expectation concerning the price development to name a few – whether for Bitcoin, whether for other currencies. Therefore, there are quite a few frustrated new investors who now take their money out of the market – even at the cost of losses.
At the point can also be mentioned, that’s not fine also the classic stock market: since late January all major markets such as the S & P500, NASDAQ, Dow Jones, are the SSE composite index and also the DAX to fall. This is interesting, because the Kryptomarkt has so far always counter-cyclically behavior to traditional markets. Both of the Kryptowährungen as also the raw materials market was seen as a protection against the stock market. Certainly you could express the hope, that aligned such counter-cyclical behavior now might use, but it is still too early for such forecasts.
Great Falls are not the end of Kryptowährungen
all of these reasons were intent on the part of BTC-ECHO with own articles and yesterday a look at the most recent shock. We have always strived, both just FOMO as such to counteract excessive FUD gently. And now something must be written against the latter.
The above reasons have a property in common: none of them represents the fundamental value of Bitcoins in question. Certainly the transaction fees in the case of Bitcoin in height were shot, certainly there are scam-ICOs, but none has questioned altogether the sense of a decentralized, distributed peer-to-peer network. Instead is thinking about the value of distributed ledger in sectors further. The interest in Bitcoin is growing again with the lightning network and currently very low fees. Other Kryptowährungen evolve, mid DASH to appear so evolution, to name just a milestone.
Also different messages be seen negatively than they actually are: is a prohibition with respect to the acquisition of Kryptowährungen using a credit card, when you consider that classical shares by using a credit card can be bought, not surprisingly, but the standard policy, which relates to the acquisition of equipment. Also, the prohibition of advertisements in the crypto field on Facebook and Instagram, not the worst is if you remember most of the commercials. If we want that Kryptowährungen be taken seriously, then we should not see actions which support such a seriousness, as an attack.
Winter is coming? Then let him come
I’m openly: currently I see no short-term improvement. It may be in fact that a prolonged winter is imminent to investors in the Kryptobereich. A look on the front some time ever discussed weekly chart shows that Bitcoin is now effectively fell under the EMA20, a major support:
in addition to the candlestick chart MACD and the RSI plotted. To analyze the MACD behavior over several years that is as well as the candlestick chart, plotted logarithmically. We see that a fall under the EMA20 no longer occurred for a long time. The times where this has happened are circled. A look at the MACD shows that the fall in may 2014 from the beginning of 2014 in if different that the MACD has fallen significantly steeper. Another difference is that the RSI was significantly lower. If one compares with the previous occasions when this has happened, the current fall under the EMA20, the current situation is similar to the more red than the purple circled – it can be so that the price falls even deeper.
Well, is winter the end? If, as described earlier, the technology and the disruptive potential behind Kryptowährungen not attacked is certainly not! Accordingly should be seen rather temporarily the current times and perhaps upcoming winter. Some time ago, I have written about it mindset what you should have in the case of Kryptowährungen, and those words are today: we should be not nervous and sell best with great loss, but calm. The Exchange in our slack with other investors and traders that the market almost around the clock under the magnifying glass helps me personally take. As well, I can recommend the estimates that we share in our Kryptokompass just newcomers on the market.
We think more in the direction: how often have I heard from people that they would invest in Bitcoin it would only not so expensive! Bitcoin course has fallen dramatically, according to you could think about a buy! And with regard to the concern to achieve the dip: that a trader has the goal is completely understandable, the long-term investor should think but also in the long term, why here rather a cost-average approach, each month a fixed amount invested in the Bitcoin is useful. As I have shown elsewhere even those end of 2013 to the former alltime would have started high with a investment already in January 2016, Bitcoin course was still well below the course by 2013, with would be one stood by 25% since.
The order of the day is so “keep calm” (or HODL, who this is dear) and become again aware of, what impressed us at the technology and the disruptive potential.