These days are very sad days for cryptocurrency markets around the world. The last three days of the crypto market have been hit by heavy red rain, many people may be wondering what is happening and why all the crypto markets have experienced a significant decline in recent days. Of course, this makes the trader's psychology chaotic and may cause concern that the nightmare of 2018 will happen again, but this time I will give my speculation and analysis about this recent trend and I hope this can help alleviate the traders' psychology. Hahaha.
The results of my analysis conclude that this recent trend is caused by 4 + 1 main factors, namely:
1. South Korean Police Raids Against Bithumb
Reporting from Seoul Shinmun post, It was reported that the Seoul Metropolitan Intelligence Police conducted an investigation, search, and investigation at the Bithumb office on September 2. The investigation brought in Bitbumb leader Lee Jung Hoon over an alleged fraud case involving a crypto token (BXA) and purportedly the token in Bithumb's native token which caused investors an estimated loss of $ 25000000. Apart from that, the Coinbit exchange is also being examined but the case is not yet known.
Of course, this is very unfortunate considering that Bithumb is the largest exchange in South Korea and the top 10 in the world "according to CMC market capacity". Cryptocurrency prices can also be influenced by fundamental factors so that if there is bad news, crypto prices are also likely to fall.
2. Crazy Ethereum Gas Costs
Recently, the transaction fee/gas fee on the ethereum network is very expensive and unreasonable, this is due to the overload of the ethereum network. As a result, many exchanges have adjusted (increased) free withdrawals of ETH, USDT, USDC, and possibly other tokens to balance the ethereum network to remain comfortable to use.
The increase in gas fees caused the ethereum price to decline (even though at the beginning it had a significant increase) this also resulted in a decrease in the price of Ethereum-based Defi coins.
3. Large scale Bitcoin sales & US Dollar Index recovering from support
According to some analysts, the sale of large amounts of Bitcoin (BTC) in a short time contributed to the downward trend in Cryptocurrency prices, and this is also expected to cause the price of Bitcoin to decline over the next few days.
The US Dollar Index which is recovering from its annual support (12000 USD) is also contributing to the bearish trend, some analysts hope that the price of 10 000 USD can become a new Support Level so that the Bitcoin price will rise again.
4.The 51% Ethereum Classic (ETC) attack
From July 29 to August 1 Eethereum Classic underwent twice 50% attacks, the perpetrator did double spend and is estimated to have managed to steal 800 thousand ETC. According to CoinDesk, Mingpool Ethermine, Bitfly and Binance reported a reorganization and in this case, several exchanges suspended the withdrawal process or increased the number of withdrawal confirmations to 50000 confirmations with an estimate of about 8 days.
The five factors above certainly make the cryptocurrency market shake violently and cause red rain which will likely occur in a few days. but even so, some news such as the launch of Ethereum V2.0 (although there is no exact date) which according to some experts could make Ethereum crypto prices and ERC-20 tokens as well as Eethereum based Defi tokens will experience a significant increase in price.