Black Tuesday of cryptocurrencies or why Bitcoin went into a peak
Such a new investment direction as cryptocurrencies has caused a huge stir among traders, investors and ordinary people.
An unknown electronic currency like Bitcoin reached its maximum in 2017 and cost about 20 thousand dollars.
Agree, for an asset that was worth nothing five years ago, the growth to the 20 thousand mark was simply phenomenal, moreover, none of the investors will remember such growth in such a short time.
Why did this happen? Because Bitcoin offers an alternative to the existing monetary system, complete confidentiality, tax protection and, most importantly, an uncontrolled flight of the exchange rate, which cannot be influenced by any bank or government in the world.
But how justified is the exchange rate of this crypto currency today?
The viability of cryptocurrency as an independent entity is highly questionable; everyone has become accustomed to enormous volatility, but the real strength of a currency is demonstrated not by price fluctuations, but by a stable exchange rate.
January 2018, or more precisely Tuesday the 16th, turned out to be a kind of Black Tuesday, as all currencies collapsed by 25 percent or more.
Unfortunately, Wednesday, January 17, proved no less tragic, as bulls and bears are already battling around the $10,000 per Bitcoin level, and the downward trend has not disappeared.
Everything would have been fine, but panic gripped the cryptocurrency market, leading to a sharp decline in the market capitalization of the entire segment. What caused this collapse, and why hasn't the desired recovery begun?
Unfortunately, the end of 2017 and the beginning of 2018 were very full of negative news for Bitcoin and cryptocurrencies in general.
The beginning of the epics was the appearance Bitcoin futures on the stock exchange. On the one hand, the appearance of such an asset on a reputable platform should attract huge capital, accelerate growth, and, most importantly, reduce volatility due to increased market capitalization.
However, the old investment world is harsh, and assets without proof of real value have a very hard time gaining trust.
Therefore, the first strong blow to Bitcoin was dealt by Warren Buffett, who called the cryptocurrency a typical bubble that would follow the same fate as similar assets.
Naturally, such a statement led to futures not only being bought, but also actively sold. The confrontation between market makers and the crowd always raises eyebrows volatility!
The next factor that caused Tuesday's decline was the so-called "BAN," or, in simple terms, a complete ban on cryptocurrency trading in China. According to some reports, the Chinese hold approximately six percent of all cryptocurrency.
However, the parade of bad news was not limited to China; a number of bills have emerged to tighten regulations or completely ban cryptocurrency exchanges in South Korea.
A week earlier, France and several EU countries advocated for active regulation of Bitcoin and the cryptocurrency market; moreover, a similar topic was promised to be raised at the G20 summit.
Given that blockchain technology itself is based on anonymity, and the very nature of crypto is such that it will only be viable if users are completely anonymous, the threat of being banned or regulated in EU countries is tantamount to collapse.
January 17th will also be remembered by many for another piece of negative news: the collapse of the Bitconnect exchange.
Many developers criticized this platform, but after an inspection by several US regulatory agencies, it turned out that the platform was nothing more than a pyramid scheme that was deceiving people.
Bitcoin Patterns: No Panic
Enormous growth, and especially high rates, greatly dulls the investor's instinct for self-preservation and his caution.
It's quite difficult to get used to the sharp drops in the chart when, for an entire year, Bitcoin has been flashing across the news feeds with record historical figures.
However, it is not worth it because of the problem that has arisen corrections There's no need to panic, because if you look back, you'll see that this isn't the first time Bitcoin and key cryptocurrencies have experienced such a decline.
Moreover, such panic moods have always become the starting point for growth and renewal of new price highs.
Many people are now asking a logical question: what should we do? Will panic really overcome common sense?
In fact, if we rely on the investing and trading rules of the world's strongest investors, it turns out that they earned their capital during such panics by making long trades.
This decline in the price of cryptocurrencies is simply an excellent opportunity to buy cheaper, and the drop in Ripple and Ethereum, along with Bitcoin, by more than 20 percent will allow you not only to make money but also to diversify risks.
It is recommended to set pending buy orders, which will work when the price starts to rise, and if the price continues to fall, the deal will simply not take place.
So if you previously didn't have the money or the desire to take risks due to Bitcoin's huge price, now is the time, because panic is a time of great opportunity!
