I have been calling for a while now that I believed the entire crypto market, especially the altcoin market would most likely go through a pretty large correction, just because of the fact that there are so many currencies out there that have little to no user base. With the rise in the price of bitcoin, many of the exchange rates we saw just stayed the same which brought the coins up to all time high market capitalizations. This is really not how the market is supposed to work when it is high functioning. In my opinion it was only a matter of time before the market as a whole realized this and that is what we saw yesterday.
I should say that most likely bitcoin will also see a decently sized correction in the weeks coming up to the August usaf and potential hard fork if both side’s threats end up happening. Many people don’t want to risk their money essentially splitting into two chains and might be pulling out for the time being. There is also a possibility that some people are actually going more into bitcoin to make sure they get more coins on each chain if a split happens. Both of these possibilities could account for the exchange rates of altcoins into bitcoin falling.
The problem with the altcoin space is that, while many coins do have novel features and are great test nets for larger coins, they are almost 95% speculation. Bitcoin is speculation as well, but there are some use cases that people are using it for, like store of value for example. The altcoins, even if they do bring good features, are still being worth more money than some companies with a ton of revenue and employees. There are coins with a 100 million dollar market cap that literally have one or two developers who aren’t even particularly skilled.
This is the same thing we saw during the time of the dotcom boom when, now infamous sites, like pets.com, were being valued at amounts that didn’t warrant the value. I think we are seeing the same thing today with the app market in silicon valley and in the coin and IPO markets in crypto. I just don’t see this being able to sustain itself for a long term period of time without corrections happening. When there are people who are upset because they only got a 3x return instead of a 10x one, you know something is wrong.
The good thing about corrections though, is that it will show which coins actually have long term survivability and the ability to weather the storm. Those which had developers who were just looking to get rich quick, or a user base that was simply just speculating, will see large sell offs and potentially die. But in the rubble is where real tough and useful currencies will thrive. It is time for them to show what they are made of and that they can stand the test of time. Even if this was just a fake out and we see full returns in the next few weeks. I think a correction still needs to take place, for the entire space, including bitcoin.
Thanks to @Elyaque for the badges
Honestly, until we see a drop of about 50%, it's hard to complain much. A correction that only sets you back a few weeks isn't that impressive.
This correction was refreshing, shows that the market is still functional. It's a good opportunity to buy quality coins on sale, don't miss out!
Going to add a quote everyone should keep in mind :
"the market can stay irrational longer than you can stay solvent"
Yah it is shopping time! I expect BTC to fall still to about 1600-1900 before BIP 148. "Buy low, Sell high" this is the perfect example to buy LOW :)
Craig Wright with fucking miners drop bitcoin, want to fork? fork yourself!
I second that
"When there are people who are upset because they only got a 3x return instead of a 10x one, you know something is wrong."
Right?! People in crypto world expect monthly returns that other investors wouldn't expect in a year. Even these "corrections" are tiny when you consider value is up several hundred percent from the start of the year.
I'm happy to see Steemit so strong during this bear market - everybody's on the same page of "stay calm and hold your tokens", we've seen this before. While other altcoins may face the reaper, I suspect Steem's robust development team and community will help it survive and prosper.
Very true!!! lol
I actually believe the correction is just about over.. and the only reason I am saying that is because I am basing this off of total marketcap destroyed. At the height we were near 115 Bln Mrkcap... now we are around 81 Bln. This is roughly a 20-25% correction which is normally a good time to load in when in a bull market.
With Bitcoin in a state of flux due to the upcoming fork on August 1st I wouldn't hold my breath that the correction is over just yet. In fact such rises can often see a correction of 61.8% or more, so there is still room beneath us that things can fall to.
Good point... Fundamentals always eclipses Technical Analysis in the long run...
I think they play in tandem. The 61.8% I mentioned is a Fibonacci ratio taken from Technical Analysis :) But, YES, we have to be aware of what's going on in the market otherwise TA falls apart entirely
Great analysis - upvoted
Thanks bud :)
Thanks for sharing the info.
But I would like to ask do see further correction in Bitcoin?
I certainly do.
Personally I'm hoping it has already corrected. It was an opportunity as well to change altcoin portfolios and really do some hard research. I think Bitshares, Antshares, Lisk, Verge will come out on top and do big things in this next run but thats just what the research I've done has led me to believe... Good work. Followed.
Where it can go ? Thats the question, when to buy back or sell, hard to say...
Personally I think this is a good opportunity to get into LiteCoin. I think many investors will see it as a safe haven building up to the August 1st deadline. It is one of the few altcoins that has good use cases and a level of market adoption.
we will see... what is happening on August 1st?
BIP 148! It is a hardfork of Bitcoin which is resulting in all this panic and the prices of all these coins falling
BTC is now 2395 USD and I am delighted hopefully it will fall to 1,000 USD and I'll be in like a rat in a drain pipe.
It's a correction combined with people bailing out in anticipation of August. At this point its too late to bail out, best to just hold on and come back after August in most cases. And always be greedy when others are fearful.
Yes
very insteresting post @calaber24p, I think you're right.
Good point of view. Cryptos that show survivability will thrive later on. Steem seems to be one of those cryptos which will come back up !
Do you think money from the shitcoins will go in to the good coins, increasing there value?
Its gonna end soon. A lot people wanting in on this train
It appears like it! I wouldn't mind if all these coins went even lower. I love buying coins on sale
It's shopping season! Boxing month for crypto currencies
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Yes it is
The simple question for alt-coins is do they have end user value? What can you do with (insert coin name here) beside hold and trade it? Steem for example gives its users added value. A few other coins do as well. But most of the market is filled with bitcoin wannabes.
A coin that is going to last has to bring something of useful value to the end user. Or else it will die.
You're definitely right about how the cryptocurrencies with actual substance will prevail in the long run. The rest of the alt coins out there were probably created in the hope to capitalize on the gold rush rather than to offer life-changing technology.
Good post :)
Yes, but it's a great time to load up on cheap alt coins.