The end of November and the beginning of December has seen the cryptocurrencies in a strong bearish trend. The price of Bitcoin has fallen under the $4,000 mark, and the market does not indicate that it has found its bottom yet. However, is this the end of the “cryptocurrency bubble” or just a bump in the road?
The Great but not the First Fall
Almost every dominant cryptocurrency deducted at least 80 % of their all-time high from 2017. However, this is what happened several times before. During the last bear market lasting from December 2013 to January 2015 Bitcoin fell from $1,147 to just $177. It lost almost 85 %. Cryptocurrency, as well as every other market, works in cycles of bullish and bearish trends and we are just experiencing the firm grasp of bears.
Does it mean the end of cryptos? No, it is probably just one of the negative cycles, and the market will be sooner or later dominated by the bulls again. The solution of the Bitcoin Cash fork, as well as the signs of incoming economic crisis, may return cryptos into the green numbers with even greater new highs as the investors always look for ways to keep their money safe.
The latest movements on the market has also shown that all the altcoins are highly depending on Bitcoin. Even current #2 Ripple’s XRP coin which remained untouched during the first weeks of November suffered from heavy losses, and its charts copy the one of BTC. Investors still determine the value of the whole cryptocurrency market by its oldest flagship. However, this trend could be reversed in the future, if possible investors see the practical value in the altcoins. For example, the XRP with its cross-border payment system may be on the successful side.
So, What About the Exchanges?
There are two main reasons for the November dip — the hard fork of Bitcoin Cash and the new wave of regulations announced by the states as well as the uncertainty about the G20 meeting in Argentina. The cryptocurrency exchanges reacted immediately, and the investors started to sell their shares in panic further confirming the bearish trend.
The current market cap of the whole market is around $110 billion which is about eight times lower than during an all-time high in late December 2017.
The probable outcome of this situation is that some of the decentralized exchanges that emerged during the notable bull run will probably not survive. The investors tend to stick with the centralized exchanges that provide higher liquidity. Recently very popular decentralized exchanges suffer from great volatility, and the doubtful investors will not risk losing all their money in a matter of minutes.
Will They All Survive?
In the recent year, the market exploded with many new cryptocurrencies being added frequently without any purpose. The current crash will probably lead them to demise as fast as they appeared. The primary interest currently lies around several coins that are believed to have a specific practical purpose in the future — BTC, XRP, ETH, XTM, LTC, IDA, TRX, etc.
However, the analysts predict that many altcoins do not have any purpose other from gaining investors’ money. Moreover, it is them which will probably suffer from the recent crash most heavily as well as during the probable economic world crisis, when the investors will only put their money into the well-known and secure coins.
