As the digital currency and Bitcoin markets continue with the hustle of finding support, the global cryptocurrency market cap has lost around $99 billion from June 26, 2019 (when it was standing at over $355.5 bln) to today. So what is causing all this to occur now?
As we all know, Bitcoin(BTC) is the primary trading pair with other cryptocurrencies or tokens in most major cryptocurrency exchanges. If the price of BTC skyrockets, most other altcoins and tokens will also sugre, sometimes even surpassing BTC in price movements with regards to percentage.
If BTC/USD price falls, so will it. Traders like this volatility nature, but small venture capitalists who try to grasp the timing of the market are often eliminated. Although the hype within the Bitcoin blockchain network reward is about to be halved, the virtual asset market has recently fallen into a downturn for three reasons. Let's see.
Its almost a week now, since the Chinese New Year (CNY) began, and grand celebrations were (are still) being held throughout China. Remember that, this year is the Year of the Rat. Although China bans cryptocurrency trading, China is among the biggest cryptocurrency markets in the world.
Arthur Hayes, CEO BitMEX, predicts that with the arrival of the CNY, the price and trading volume of bitcoin will fall sharply. This is because Chinese investors will traditionally "cash out the New Year" to commemorate the CNY (jollifications go for close to a full month), and will suspend digital currency trading. In the past 7 months (from June 26), BTC/USD has fallen by about 32% (from trading at $13,793 to the current price of $9,300), according to data from coinmarketcap. If this year is the same as in previous years, his prediction may be correct.
Bitcoin was born only about 11 years ago, but we can still predict its cycle by analyzing prevailing market info. Basing on the tradition, the Q1 has always been pessimistic about BTC. Since Bitcoin was the original cryptocurrency and market leader, all other cryptocurrencies are very relevant. Since almost all other cryptocurrencies are paired with BTC on popular exchanges, they are often enormously affected by price changes.
This implies that if there is a phenomenon that causes prices to fall (as many have speculated about the reaction to the CNY), then a good number of cryptocurrencies will register a deep fall than Bitcoin. Several analysts predict that the amount of new BTCs to be issued will be halved, which will eventually lead to price increases, but this is usually a delay and does not actually cause the price to skyrocket immediately until people feel scarce Increase, as supply decreases will make this phenomenon more apparent.
Analysts insist that institutional investors are currently accumulating large amounts of Bitcoin. They all came up with a compelling reason that hedge funds and "Crypto Whales" use sell-off strategies to keep the price of Bitcoin within the $ 6,000- $ 8,000 collection range to get massive before halving in May, 2020 much BTC risk exposure.
If BTC holdings are an indicator, the cryptocurrency community should see a sharp increase in prices. Once cryptocurrency miners reduce block rewards, additional scarcity will put price pressure on the current bitcoin supply. Following the previous halving, we saw the world’s leading altcoin rise to an all-time high of $19,891. Many cryptocurrency users are optimistic that the forthcoming halving will have almost related sway on prices.