Bitcoin has been tumbling, down around 20% at one point just today.
Earlier in the week, Bitcoin was trading for just under $3,000 per coin, then suddenly the rug was pulled and Bitcoin has been fading ever since.
A few hours ago Bitcoin traded as low as $2,000 per coin, making for over a 30% decline in prices since the highs of Monday.
However, it's not just Bitcoin that has been falling. If you look across the virtual currency space you will likely see a sea of red.
What gives?
Well a couple things actually.
First, there has been the major outages and hacks on major virtual currency exchanges.
On Monday evening Coinbase was shut down due to extremely high trading volumes. Bitcoin seemed to weaken considerably after that announcement.
Coinbase has been one of the better exchanges out there to date and they have been having numerous problems recently. Today when I tried to log in, the site was again down with something along the lines of this posted on their website:
We are investigating issues with load times and customers may be unable to load or log in to the website during this time.
It was unclear how long that warning had been up, but I know for me personally, I was unable to access the site for over 2 hours.
Then there was the issue with Bitfinex.
They tweeted on Tuesday that they had been under a DDoS attack. Which further squashed confidence in the space.
Especially when you consider that Bitfinex had over $65 million stolen by hackers last year alone.
Basically people are being reminded in a very abrupt way that the infrastructure for the virtual currency space is still very much in it's infancy and liquidity can be a problem at times.
The founder of Atlantic Financial and board member at Bitcoin Foundation, Bruce Fenton was less worried and had this to say regarding Coinbase:
"Coinbase's issues are just typical growing pains. When the whole financial system is upended, it's bound to have some bumps in the road."
I especially like that middle part, "When the whole financial system is upended...."
Remember folks, these virtual currencies are either going to change everything in terms of how people transact or they are going to zero at some point. They are either going to be worth a lot more or a lot less.
I am betting on the former.
Some other possible causes for the recent weakness in the space:
The Federal Reserve raised interest rates, which in general tends to put a damper on riskier assets. US Tech stocks took a bit of tumble ever since the hike. It is a bit unusual for the FED to be raising interest rates at a time when inflation rates are going down, but we have been living in unusual monetary policy times for quite some time now.
Also...
At the time that Bitcoin was declining, there was a closure of millions of dollars in long positions on OKCoin. Which is one of the major leveraged Bitcoin exchanges. That selling likely exacerbated the moves down.
The actual decline was probably caused by some combination of all of the above. Likely initially sparked by a change in confidence. Markets sure are fragile things aren't they?!
Stay informed my friends!
Sources:
https://seekingalpha.com/news/3273785-bitcoin-track-worst-week-two-years
https://www.bloomberg.com/technology
Image Sources:
http://fortune.com/2017/03/09/bitcoin-sec-etf/
https://www.bloomberg.com/technology
https://www.guerillastocktrading.com/business/why-the-coming-fed-rate-hike-could-leave-you-broke/
Follow me: @jrcornel
It seems like a harsh reminder at the moment.
However, I am reminded of Andreas' talk about Sewer Rats and Bubble Boy. We need attacks like this on the infrastructure so we learn our lessons.
The trust of the masses must be earned by our learning curve right now.
That is so very true in how sometimes we can have that liquidity in our virtual currency world. Growing pains are painful, but the outcome will be most beneficial for those who are patient.
Absolutely.
Thankfully, we are on this side of mass adoption.
I don't think we have come anywhere close to mass adoption - these are these teething pains :)
Agreed.
Watch out below. What will happen when the stock market crashes or when they announce a recession or when a gov shut down occurs????? Fiat currencies are risky. Most of the money made is either longggggg term investments or by crookery.
Truth.... speak it.
Its time to buy I should say.. As an avid trader you should buy @ every dip and I bet it will go to 3300USD in near future..
So Buy some and hold .. "Diversify and hedge"
I agree, it is time to buy.
I'm in the U.S. and bitcoin kept teetering on that $3,000 line before it dropped off. I would not be surprised if it breaks through to your $3,300 price target on its next run.
It's funny how the age old advice continues to ring true - buy some and hold... "Diversify and hedge."
Yeah.. old is gold.. alwayss
we have seen worst, segwit activation will pump the price higher 3k$. All emotionnal manipulation to accumulate more bitcoin.
For people worried about these price drops, here is an image of June 2016 :)
... Relax!
All about perspective!
That table gives us some!
Hi Pablo, I can't seem to open or enlarge the picture, do you have a link?
http://bitcoindood.com/bitcoin-blog/wp-content/uploads/2016/06/Top10coinMarketCap060516-1024x685.jpg
That adds a lot of perspective. DONT RELAX!!!!
BUYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYEEEEEEEEE!!!!!
Kudos for mentioning the interest rate hike. It's an important and major factor that many in crypto haven't been talking about. That said, long term, capital flight will persist.
The funny thing is that almost all cryptocurrencies are going up or down at the same time. Even the level of increase or decrease seems somehow bit correlated.
Maybe there are too many people going for the pump and dump approach. Or this whole market is fully controlled by a happy few buying and dumping at the same time.
Maybe it is time there is some central market watch on the trading activities but that will take a while
I think it is also due to the fact that there are a lot of people out there that see crypto's as something with a lot of potential but don't understand the technology behind each coin and just invest in multiple coins to diversify. So they put money in on 3-4 currencies and cash out on all when they think the time is right. All does seem correlated and therefore traders will also act like it. The same patterns are repeating itself and there are some traders taking advantage of it.
It happens in the stock market too. When a leader starts to move, the followers move with it. Natural tendencies that aren't unique to crypto. With that said, because we are so young and small, the movements can swing violently when our posterchild, BTC moves, particularly with the Altcoins since most of them require BTC to buy them. Once there is a more level playing field and a decoupling of BTC to Altcoins I'm guessing we won't see the market sway with the same ferocity. Lets' see
You just need to be smart to invest when is low and sell when price is high :) btw if any cryptocurrency get under control of markets, most who trade with it will leave it and when become less attractive all this hype about crypto will gone, so lets just home that wont happened :)
So. when they are telling us, cryptos are not manipulated, there might be a little issue. Last time, a bunch of big players moved into this new market. Maybe, by buying and selling big amounts, they tested their opportunities.Nevertheless ordinary people make their moves to gain some fortune, so there is a lot of volatility. Not to speak of just normal corrections in the value of an asset.
Yup, as others have said, just hold on! It's just frustrating as you mentioned when Coinbase went down today, it was when BTC and ETH bottomed, so I couldn't add to my positions.
This is only looking at long term candles such as 1 day and longer but back around may 27th It dropped around 25%in only a few hours but the long term chnage was small since it went up about 25% the same morning.
Just another bit of turbulence, I see it all coming back up soon.
source
It will be a smooth ride eventually :)
Source: Reddit
Looks boring lol... but yeah over long term it will smooth out once it discovers a valuation. .. I've been playing the price moves though hehehe... regardless I believe in Bitcoin and Steem.... for what they are beyond the speculation and trading.
Agreed! Just gotta let it ride the coaster.
I really like this 😂
🤣 😂 🤣 😂
Yes, this is probably a multifactorial thing. A little bit of this and a little bit of that worked together to drive the price down. Anyway, the masses think the all time highs in the stock market are a sign that everything is great and probably think the BTC and altcoins prices sinking are a sign that cryptocurrencies are not that good...
This decline was coming. It will shake out the weak hands. HODL strong.
Agreed. These shakeouts will keep happening all the way up. They are buying opportunities.
Also recent events highlight importance of keeping large amounts on the centralized exchanges. They have the volume, so are good for trading, but the majority of your coins should be kept more securely.
Its no coincidence that with the troubles of Coinbase, Bitfinex, Poloniex that a decentralized exchange - Bitshares - has been booming!
Yeah it's a good old tree shake. If Bill Gates says Bitcoin is the future, then it's the future. The head of Paypal has in the next 10 - 15 years they're going to be worth A LOT!
I like the way you think.. I was able to catch the dip and purchase more. I'm just gonna Hodl over here in the corner now.
I think the move here is panic sell guys.
;)
One, we were due for a correction.
Two, the Bitmain announcement got statists all upset and pulling money out.
Is just the opportunity to buy even more!
Golf instructor?! That's awesome! You post golf stuff ever? Rooting for anyone this weekend? I've been playing fir years but still haven't managed to break a 10 handicap. 😢
I had met an investment guru sometime back. He was a share market expert. I feel what he said me that day holds good even with cryptocurrency. He told me " Once you start trading, it is a "no look back business" You are trading because you trust that this is going to get you profit. If you feel that a fall in pricing or a monetary loss is going to pull you out of trading you shouldn't have tried trading the first hand. Because you don't trust your own choices. I feel that is something which we all need to understand and realize as well. Most market calamities have a small, little or an obsolete root cause and it's usually the panic in the minds of buyers and sellers that propagates this fear to make it worst. So my policy is that " I invest because i trust it! And once i trust it, i don't really care much about the rising or the falling curve until i don't trust it anymore
Congratulations @jrcornel!
Your post was mentioned in my hit parade in the following categories:
Thanks for this post @jrcornel . I was wondering the same today, when I saw bitcoin at $21xx level at bittrex, but it already recovered a lot. And once CoinBase returns, we can hope to see big recovery!
Have a nice day!
The title is very incorrect,worst week in more than 2 years??, price of btc fell more than 33%(2760 to 1860) on May 26, which was just 3 weeks ago!
Buy
The strategy is to buy low and sell high and you will always be in profit. However how do you know that it is low at that point in time? the strategy is to hold in the long run, take out some profit and diversify to Etherium, Dash, Monero, some sleeping beauties and Steem which is my best due to its ability to take over social media..a win win for all of us. Good post @jrcornel and thanks for your comment @danielownsall upvoted. Lets all stay in touch
I don't know if it is "low" it is lower then the "high" and I have good faith the "high" wasn't the last one.
People tend to over react whenever market corrects itself. Bitcoin will rise drastically by year end ie if the limitations (see my page post for Bitcoin and Steem issues) are resolved.
It's no big deal! I have been telling my readers to wait for $1,300 to get another entry point. https://steemit.com/bitcoin/@longnshort/stop-panicking-btc-eth-and-xrp-price-action-updates-and-ongoing-thoughts-8
I have upvoted you.
Https://steemit.com/aceh/@syibran/my-current-activity
Can you answer / upvote this?
Applause,
Follow me at @syibran, will do the same
@jrcornel. I just upvoted you, and it went up $250.
whats up with that?
Haha, indeed
Feel very bad for this...yesterday I was trying to withdrawal bitcoins but the rates going down...
I won't lie. Even though I am pro-crypto, I got worried about bitcoin's drop... It is quite significant.. It's natural to be worried though and I expect it to rebound. I just don't know when.
I agree. I'm a bit late to the crypto party but I'm early on Steemit so I'm stickin to this thing for the long run. If nothing else...just for spite against the Wall St controlled social media ghettos.
Hey what does everybody think about PotCoin? I know they paid Dennis Rodman to wear that shirt to North Korea but it seems like they have good intentions.
Buy on panic, sell on greed. - Warren Buffet.
Thank you very much!
Would you mind if I translated your post into Korean and shared it with the Korean community?
Go ahead!
Of course that was bound to happen. It was going way too high. The correction was inevitable.
good knowledgable article
Lots of people dumping to collect their investment and lots of people just getting on board either way your right the infustructure is still in its infancy but once it's up and running look out.
People should look on these dips as opportunities to buy rather than times of panic when they should sell. It usually pays to be a contrarian and not follow the herd. :)
Yep, falls like these provides good opportunities to buy some more for those of us that believes in the long-term viability!
If Bitcoin survived and prospered after MtGox the same will happen here. One thing to consider is that as a community we must remember to support those who were hurt by the theft. I myself was effected by MtGox and dropped out of crypto for sometime after unfortunately.
ether will be higher than bitcoin next yr ?
Support seems to hold @2.050 expect some resestance and selling @2.525. ( Top of downtrend channel that was started and come in play at the recent top on 11th of June.)
So far looking good.
yup, the big players are stirring up the market those that control the federal reserve Bangsters !
Good post thanx jrcornal
Gemini has been unscathed. Also, inflection point on BTC/USD 4H - support at 2200.
I imagine quite a few people are freaking out about this I'm sure a lot of people invested near $3000. I read tons of celebrities tweet about their large btc purchases. hopefully not too big.
As all financial assets when there's huge buying season ... comes a selling season, until it become stable for a long period. Those changes dont mean that the bubble explote... i really dont think this is a bubble... what do you believe?? any ideas??
https://criptonoticias.com/mercados/bitcoin-reacciono-fuerte-baja-posible-bifurcacion-cayo-menos-2300/#axzz4k75EmaK7
There were drastic declines in nearly all cryptocurrencies today.
Thanks for this post. Helps to clear some stuff up
Great info @jcornel.
Also, there's a new bill that was introduced on the floor of the US Senate entitled, “Combating Money Laundering, Terrorist Financing, and Counterfeiting Act of 2017.”
Link: https://www.congress.gov/bill/115th-congress/senate-bill/1241/text#toc-idea0e9489fc8f46379f95bb56c8bbbda5
Just another thing to make some people nervous.
Yes, I saw that as well. Confidence is such a fragile thing in markets...
This was bound to happen. But i believe it would rebound. Some of the neglected altcoins will surprise us.
I think this drop creates an excellent opportunity as explained in my post... it is an investment and you can make something from it.
thanks for sharing, I was looking for the reason why it's happenig and I finally find it here, I call it red week of bitcoin : Cryptocurrencies are in the Red !
Nice article, I really liked this one!
See Tips & Tricks blog of BTC's
thank you man :)
I wonder how far BTC is going to go down from this correction. I want to get in to buy some more. Hopefully coinbase is back up now since you tried.
Its recovering as we speak.. its always a good day to buy BTC
Haha I like this ^ :)
That's been the issue all this year - the price rebounds before I have time to buy more!