Why is the Crypto Market Bleeding Now? Fundamental Factor Analysis

Why is the Crypto Market Bleeding Now? Fundamental Factor Analysis

The cryptocurrency market is experiencing a difficult period. We can’t say that breaking through the mark of $4,500 for Bitcoin was so expected. Everyone was waiting for the final drawdown before institutional investors’ entry. But panic news and forecasts intensified only after the loss of $5,000 support. So why is bitcoin falling (as well as other cryptocurrencies)? Should we wait for growth?

Fall Factors

Bitcoin, as well as the entire market, began to fall amid the conflict between Bitcoin Cash ABC and Bitcoin Cash SV. This loud fork was considered to cause the market decline. While the BCH split has passed, the fall has not. At the same time, the decrease in the price for the main cryptocurrency obviously does not correlate with the costs the ABC and SV teams have born for a hash war. It implies that the big players decided to use the fork-caused price decline in order to push the market through.

The news background should no longer be considered a factor of bitcoin price falling. Yes, it cannot help affecting the market. But when it comes to such a serious drawdown, the news about the decrease in search queries about the crypto or sales of mining equipment do not look like the basis for a dump. Again, we have reason to believe that the market situation was successfully used by large players.

What are these big players? These are institutional investors. They are often spoken about, but no one has seen them. We will not see them until February 2019. That is why fans of technical analysis are confused by the lack of supports and large volumes.

It is in February next year that Bitcoin-ETF will be approved. Pay attention to how much they talked about this in July-September 2018. Where is this hype today? It does not exist precisely because institutional investors do not need excessive users’ expectations. Maximum loss of interest from the broad masses is the perfect deal for entering the market. Well, the launch of Bitcoin ETF will open the door to huge purchases.

We expected the continuation of the flat. But institutions have a different opinion. There is another important factor in the fall of the market.

Cryptocurrency still has a very weak user base. On the market, there is a huge surplus of coins, which should become a means of payment, exchange and accumulation. The global economy is much more interested in blockchain technology than in a huge selection of cryptos. It is blockchain platforms with broad functionality that will determine the future of the market in a few years. Projects stating that they will replace the imperfect bitcoin, only pump up the market with false volumes that easily deflate at the earliest opportunity.

A Little Positivity

The preparation of the market for the institutional investors’ entry, which pulls the course to the bottom, is the main factor of growth in the future. The situation is paradoxical, but more than logical. Institutional volumes, which will begin to flow into the crypt at the end of winter, will be a powerful trigger for growth. We will moderate your appetites – there will not be such pumps as before. But good growth is guaranteed.

In addition, BTC value significantly depends on the miners. So far, we can observe relatively stable bitcoin hash rate figures. By miners, we mean pools, not home farms. This suggests that mining the crypto is still justified. The average cost of bitcoin is about $ 2000. However, this is only with account of electricity cost. The recoupment of fixed assets is not taken into account. The payback limit for large mining is around $ 4,000. The figure is quite approximate but it fully reflects the real situation with the BTC safety factor. Playing on the market should not jeopardize mining and critical reduction of hash rates. The price cannot fall forever. As far as mining is concerned, after breaking through the $ 4000 mark, a rebound should follow. However, now we do not give any predictions. We only analyze various factors and try to find some logic in the events. Unfortunately, this is not always possible.

But we are not the only ones who are positive. A well-known crypto enthusiast and investor Joseph Young wrote on his Twitter:

 The Bottom Line

Do not rush to buying the dip. It is extremely difficult to determine the dip accurately. We are ready to vouch (99%) only for the fact that the market growth is inevitable.

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Why is the Crypto Market Bleeding Now? Fundamental Factor Analysis
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