Will the Crypto Market Rally by the End of ’18 ?
- October 3, 2018
- Posted by: cryptoswolf
- Category: BitCoin, Blockchain
Historically, over the past nine years, Bitcoin (BTC) has experienced four major corrections, all of which led Bitcoin to decline by more than 80 percent in value. The correction the crypto market experienced in 2018 resulted in a 69 percent drop in the price of Bitcoin, with some other cryptocurrencies like Binance Coin (BNB) and EOS recording smaller losses.
In August 2010, August 2011, January 2014, and January 2018, Bitcoin demonstrated 70 to 80 percent losses against the US dollar.
The Bitcoin market has matured throughout the past nine months. Despite a steep decline in the price of Bitcoin, the majority of investors held on to their investments, minimizing alterations in their positions even during a period of uncertainty and extreme volatility.
“The market seems to have recalibrated after the entry of so many new market participants with different beliefs and expectations than those who held Bitcoin prior to 2017. Neither long-term investors nor new speculators have changed their positions much this summer. This suggests that the market will make a major move, for better or worse, only in response to a fundamental change.”
The maturity of the Bitcoin market has been evident in the stability of BTC since Aug. 6. Over the past two months, Bitcoin has remained stable in the $6,300 to $6,800 range, rarely breaking out of the $6,800 resistance level, while other cryptocurrencies like Ripple and Ethereum demonstrated high volatility.
Within the two-month period, Bitcoin dropped nine percent of its market valuation while Ethereum and Ripple recorded 50 percent corrections, which ultimately led both XRP, the native cryptocurrency of Ripple, and ETH, the base currency of Ethereum, to surge in the second half of September.
The increase in the stability of Bitcoin has allowed the market to become less sensitive to hype and specific events. Major positive developments in the cryptocurrency sector — such as the formation of Bakkt by Microsoft, Starbucks and ICE to improve the accessibility and liquidity of Bitcoin — barely had any impact on the short-term price trend of Bitcoin.
Experts including ShapeShift CEO Erik Voorhees, billionaire investor Mike Novogratz, legendary venture capitalist Ben Horowitz and Coinbase Chief Technology Officer Balaji Srinivasan believe that the crypto market will recover in the months to come.
Trend of major cryptocurrencies in 2018
On CNBC’s “Crypto Trader,” popular cryptocurrency trading platform ShapeShift CEO Erik Voorhees stated that the bear market of Bitcoin and other major cryptocurrencies is gradually coming to an end.
Voorhees explained that, while the bear market is not completely over — given the 80 percent drop in the valuation of the crypto market — the market seems to have recovered from the worst part of the correction.
“I don’t expect it [the bear market] to end soon, although I do think that the rate of collapse has slowed considerably. Generally in these bubbles, after you go through several months of a downtrend, you hang out in a range for a while […] But I think we are done with a majority of the collapse.”
ShapeShift CEO Erik Voorhees
The analysis of the cryptocurrency market by Voorhees accurately described the current state of the market. Since June, the crypto market has been engaged in a bottoming-out process, maintaining tight support levels at the low level of $190 billion and attempting to break out of the $220 to $230 billion range.
For instance, on Sept. 25, the price of Bitcoin Cash (BCH) hovered around $420. As of Sept. 26, the price of BCH remains above $540, up more than 20 percent on the day. As such, Voorhees noted that it is a viable time to start accumulating crypto, because the market has been volatile in its low price range.