Cryptocurrencies down 23% for July... is this the bottom?

Economic Speculation Forum - Jul 13th 2017

  1. evo

    evo Admin

    Joined:
    Apr 2017
    From:
    Seattle
    Crypto:
    BTC/ETH/XRP
    The great digital currency bull run of 2017 came to a screeching halt in early June. Shortly after hitting all-time highs—bitcoin broke $3,000 and Ethereum nudged $400—the party ended, and cryptocurrencies of all stripes plunged.

    Now, almost two weeks into July, the picture is even less pretty as most types of digital money are firmly in bear territory.

    How bad is it? Alex Sunnarborg, a researcher at Coindesk, tweeted a helpful chart that shows the respective declines for bitcoin and other currencies since the start of the month.



    As you can see, bitcoin did not fare as badly as some of its smaller rivals. The original digital currency is down around 6.5% while Ether, the cryptocurrency associated with the decentralized computing network Ethereum, is down 29%. Ripple dropped a brutal 39%.

    The average overall decline is approximately 22.7 %, though it's important to note some of these currencies are relative minnows. The market cap of bitcoin, the sector's undisputed heavyweight, is currently around $40 billion while that of Dash is $1.3 billion.

    All of this raises the question of what is driving the decline and whether the prices have bottomed out. Unlike earlier price jolts in the famously volatile digital currency market, there has been no obvious external shock—a major hacking incident or a regulatory crackdown—to explain the current decline.

    As such, the dismal July may simply represent the deflating of a bubble inflated by lots of Johnny-come-lately speculators who rushed into the market in May and June. Now, some are suggesting that, in the case of Ethereum, the market has already hit bottom.



    And indeed, in the past few days, the price of Ethereum has started nudging upward again, suggesting the prediction is right. On Wednesday, the currency had risen to around $220 from Tuesday's low of $192.

    On the other hand, when it comes to bitcoin and Ethereum, it feels like anything can—and does—happen. (Did you see the guy photo-bomb Janet Yellon's remarks on Wednesday with a "buy bitcoin" sign?)

    If you're a skeptic, you can take account of remarks this week by the chairman of BlackRock who called price charts related to blockchain-based companies "scary" and said bitcoin and Ethereum are in a bubble. Conversely, you can look to recent good news such as the IRS's decision to scale back Coinbase audits, and the lofty price targets set by Goldman Sachs, to think the crypto party is set to start all over again.

    The only safe bet at this point is that cryptocurrency will continue to be a wild ride for investors for the foreseeable future.

    Source: Fortune
     
  2. coinboy

    coinboy

    Joined:
    Jun 2017
    From:
    toronto
    I dont think this is the bottom. Still more to come as we get closer to august 1, everyone is nervous about the fork

    actually bitcoin is still doing great, although i havnt bought any even at this price

    my bitcoin purchasing days are over
    i have at least 2 which was my goal
     
  3. bakerlisa510

    bakerlisa510

    Joined:
    Jul 2017
    From:
    Canada
    I have been searching the internet since 2 or 3 days.
    I am able to under why Cryptocurrencies fall.
    Thank you so much for sharing.
     
  4. evo

    evo Admin

    Joined:
    Apr 2017
    From:
    Seattle
    Crypto:
    BTC/ETH/XRP
    Unlike stocks that have public balance sheets that show profit/loss, digital currencies tend to change valuation based on community sentiment and application development. And while the typical stock market only allows trading within a defined time frame through heavily regulated establishments, cryptocurrencies are completely unregulated and can be traded 24/7 so the market can and will have volatile swings.

    I would recommend doing research on the specific cryptocurrencies you're interested in, to understand why and what makes that particular cryptocurrency valuable and to better understand the direction and community surrounding it. Each cryptocurrency has it's unique approach with what they are trying to primarily solve, and with that comes perceived value.

    And if you want to read the high level technical whitepapers that are the premise behind each cryptocurrency, I've setup a dedicated Whitepapers section which is a repository of cryptocurrency whitepapers.

    If you have any questions as you're doing your research or about a particular cryptocurrency, post up a new thread and we are happy to help.
     

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