Cryptocurrency Market Dip- What's going on? Bitcoin Drops Below $11,000
In a predictable retracement, Bitcoin and the rest of the cryptocurrency market have retreated after a week of double digit-gains. The cryprocurrency market has lost a stunning $35 billion since yesterday, and currently sits at $312 billion. What happened, and what should a cryprocurrency investor do next? This isn't the first time this has occured.
Bitcoin and the altcoin markets are heavily influenced by whales, market sentiment and large trades. This is a constant in the cryptocurrency market. Since only a small fraction of cryptocurrency is sold compared with what is held, large buys or sells can massively move the asset price. Price follows volume and consistently low volume favors big moves when orders go through.
Another contributing factor to Bitcoin's volatility is leverage. When traders or "whales" see gains, they pile on and take on debt to buy as much Bitcoin as they can. The double digit gains we saw this week that raised Bitcoin from $9,000-14,000 was a case of traders piling on to the asset that predictably ended in a sell-off. Traders were leveraged to the hilt and left before taking losses and margin calls.
What should a cryprocurrency investor do next? As a seasoned investor and trader, all assets underwater should be held, and not sold at a loss. Next, blue-chip coins including Bitcoin, Etheteum, Ripple and Litecoin should be analyzed and purchased when the trend looks favorable.
The media has been positively promoting cryptocurrency and adoption continues to increase. Now is a good time to buy some assets at a discount. Keep on learning and studying this market of the future.
Resources:
Picture from Pixabay.
Market data from:
https://coinmarketcap.com/
Regarding Bitcoin's volatility: html?amp_js_v=a2&_gsa=1&usqp=mq331AQA#referrer=https%3A%2F%2Fwww.google.com&_tf=From%20%251%24s&share=https%3A%2F%2Fwww.cnbc.com%2F2019%2F06%2F27%2Fbitcoin-shows-its-volatility-again-plunges-1500-in-less-than-24-hours-after-exchange-outage.html
