The cryptocurrency market reached its lowest value of the year. The entire market was worth $106.4 billion, losing another 10 billion in roughly five hours. Bitcoin is now worth $3435, Ethereum dropped to $87, and XRP lost ten percent and is now valued little over 30 dollar cents. As a result, the crypto market has undone all the gains from the 2017 bull run.
Throughout the past nine years, bitcoin has seen five major corrections on which the crypto asset lost 85% in value on average. To lose 85% of its value from its $19.500 all-time high, it would need to fall a bit further towards $2950. Currently BTC lost little over 82% of its value since late last year.
Other currencies are doing much worse. Ripple lost 91%, and Ethereum is down 94%. Bitcoin Cash lost an amazing 97 percent of its value since it was priced $3785,82 at its peak.
As stated yesterday, it’s likely that the market did not bottom out yet. There’s low trading volume on bitcoin, which causes the free fall. There are no buyers to match the sellers, which hurts the price considerably. In the past month there hasn’t been a bullish moment, as the price kept falling.
With prices still going down, it’s likely that major whales will sell (portions) of their holdings to reduce financial damage. Without buyers to invest in bitcoin or other cryptocurrencies, it’s unlikely that the price will stabilize anytime soon. Bitcoin is moving towards $3000, and personally I see $2000 as the real bottom.
As stated before, this low price is not necessarily a bad thing. People will be able to buy themselves into the market cheaply. The same can be said about institutions, obviously. Mining at home will become profitable again. It makes the entire market far more accessible. But the crypto market will need a bullish moment to overcome this insanely strong bearish sentiment.
Next year there are several key moments to can overturn the current negative sentiment. On January 24th Bakkt is launching its BTC Futures, opening up bitcoin to its investor clients. February 27th the SEC will make a decision on approving the Bitcoin ETF. Fingers crossed.
In the end, all comes down to utility. Once crypto and blockchain technology are actually being used in every day life, the crypto market will finally mature.
Also published on Medium.