What is happening with Bitcoin and other cryptocurrencies?

The most influential cryptocurrency in the world, is experiencing again heavy losses, many will wonder how is it that a cryptocurrency that in 2017 went from 1,000 to 20,000 $ per unit in 2018 its descent has led to having it again at an average of $ 4,000 for the day that this article is written?

There is no doubt that 2018 has been a difficult year for Bitcoin, and that as a chain effect (one phenomenon after another) has led to the world’s strongest cryptocurrency to the downside.

In a previous article that we called “NOOOO why the crypts fall?”, We explained that the regulatory decisions of two governments gave a strong blow to Bitcoin, these governments represent great markets for the asset: China and South Korea.

This would be the first blow, since the meaning of the word “prohibition” in China or South Korea does nothing but ignite the alarms in the inhabitants, this effect is so serious domino that you would think that the problem should affect only to the Chinese or the South Koreans, but it is not like that, being such influential markets when the Chinese and South Koreans sell their Bitcoin the numbers fall in red all over the world.

Result, users panic and start selling the asset in all parts of the world, something completely counterproductive to the Bitcoin market and other cryptocurrencies.

After this attack by the Chinese and South Korean governments, which in itself helped to reduce confidence and credibility of cryptocurrencies, during 2018 Bitcoin and the altcoins have had a downward trend, the other hypotheses that are added are the following:

According to analyst Jorge Bejarano, consultant to the OAS (Organization of American States) in Digital Security, he assures that the reasons for the collapse are due to the fact that in recent months “interest has fallen or from where the most important negotiations are taking place of exchange of assets and expectations of making deals based on cryptocurrencies have declined “.

“There had been talk of establishing a cryptocurrency negotiation table and that generated an expectation of having a more serious negotiation space. However, the issue did not prosper and what it does is generate a little more distrust in relation to stability. “

The regulatory scrutiny that the digital currency has faced is the other major cause of the collapse of recent months. “The fact that these cryptoactives do not have a central authority and do not have a bank that supports them, ends up generating distrust in relation to the support that can be given,” he says.

In addition, Bejarano adds that despite the fact that Bitcoin and Cryptocurrencies have made enormous progress in terms of purchase-sale compatibility on a global scale, there is still a long way to go, “for example, in Colombia you can not buy an apartment with Bitcoin because the transactions are not authorized, elements such as these generate instability “, these elements being precisely able to support a market.

To what has been commented above is the fact that a major change in the infrastructure of the digital currency itself is coming, a change in its base code that has many Bitcoin investors accumulating cash for when the change occurs and buying coins right after . A phenomenon very similar to when the sea contracts and then return perhaps more strongly.

Another cause, according to experts, could be due to the first two fines imposed by the Regulator of the US markets against two cryptocurrency companies, Airfox and Paragon Coin, each of which will have to pay $ 250,000. This would have caused users to fear more fines, and therefore would be selling their portfolios in cryptocurrencies before the value fell further. Actually, the Bitcoin was already falling before these two events occurred, although since its fall has increased in recent days, could have influenced the decline.

On the other hand, Kevin Murcko, CEO of crypto exchange CoinMetro, told Euronews that Bitcoin’s peak price was always set to go down.

“All crypts are incipient assets, speculation, rather than the utility of technology or the underlying asset, is what has driven the movement of prices since its inception.”

“Driven by the hubbub of the media and the public’s belief that cryptography was a way to get rich quick, the asset class skyrocketed from almost nothing to over $ 800 billion at its peak. obviously, it was unsustainable, “he said.

The psychology of the market is also a factor: “Fear is a tremendous motivator, and this is what we see reflected in prices, fear of the market is cumulative, selling encourages us to sell more, nobody wants their BTC to be left to a dollar”.

To reverse the downturn, Murcko explains that we need to see a new value, that is: more real-world use cases of companies and people that actually use the underlying asset.

“This will bring new buyers, new eyes and generate a renewed demand, so that a recovery occurs after the initial bubble burst, it is necessary to show a correlation between the price of the asset and its practical value,” he said.

In every crisis there is an opportunity

From our organization we are pleased to share with you the vision of Fritz Wagner CEO of Bitdharma regarding the current bearish situation, he made the following analysis:

“Our Stop Loss in Bitcoin shows bullish and bearish BTC signals, although the overall picture was clearly bearish we can conclude that after 2 big declines; it is not surprising that a bounce occurs, we note that the next strong support will be between $ 3100 — $ 3200 (Bitstamp prices) where the convergence of points between MA200 (weekly chart) and the support area could offer a good defense “ Analysis done on 11/26/2018.

Likewise, Wagner stressed to always keep calm and sanity, you should never panic and sell, this attitude is harmful not only for people, it is also for the market, instead the CEO specialist in cryptocurrencies and Blockchain recommends have a broad and positive view under any scenario: “if it is a rebound we advise taking advantage of the maximum projection, if it is a setback this could be the ideal opportunity to invest at really economic prices with a projection towards a substantial future”.

By: Journalist Marcelo Durán.