Just as the year 2019 started, the crypto market suffered a drop in its market. The volume of the crypto market dropped from $15 billion to $13 billion as the Bitcoin price fell below the $3,600 mark. There was a buzz of concern among analysts regarding the declining volume of digital assets and concerned regarding the potential fall of cryptocurrencies without significant sell pressure from bears.
Generally, at least until digital currencies overcome the last phase of a 12-month long bear market and start a strong accumulation phase, traders and investors in the space of digital currency expect a year free of volatility. Most digital currencies are envisioned by the traders in a low price range.
What Do Experts Have To Say?
Bitcoin, along with other cryptocurrencies, has driven a wave of panic among the investors. Mitch Blakeway, Head of Trading at Quantatex said, “Despite Bitcoin’s fairly limited use cases, and even though its technology may be less sophisticated when compared to some other projects, it will likely continue to remain the market leader in 2019. Bitcoin still has the reputation and the liquidity that make it preferable to other cryptos.”
Bitcoin had approached this low value earlier in December the last year as well and had had a sharp recovery soon after that. Now with its drop to $3,000 region, it may again initiate a sharp recovery with the aid of big buy walls on major cryptocurrency-to-fiat exchanges.
Considering the lack of momentum of cryptocurrencies and the inability of dominant digital assets in the likes of Bitcoin and Ethereum to breakout of important resistance levels, cryptocurrency technical analyst DonAlt had suggested that 2019 may turn out to be a boring and a low volatile year.
“I’ve been relatively inactive this year – for one reason – there just hasn’t been too much to trade. I wouldn’t be surprised if 2019 plays out like this, boring, choppy and frustrating to trade. The worst thing you can do is force trades when your system doesn’t give you any,” the analyst said.
Cryptocurrency trader Josh Rager tweeted:
As the volume continues to slowly descend Bitcoin could see more sideways ranging
This could last for days or weeks until a decrease in buyers, currently holding up the market, at these levels
Nice support below $3,000 with lots of buyers waiting there pic.twitter.com/tgMfSRUbHJ
— Rager 📈 (@Rager) January 12, 2019
Will Bitcoin Recover?
Many crypto enthusiasts are positive about the market of cryptocurrency. Slowly many people are realising how cryptocurrencies work and how they are going to benefit them by involving in them and hence people will continue to invest in Bitcoin. The downfall of Bitcoin and others in the industry as well has happened several times before this. Bitcoin had fell to its lowest price in over a year in November last year, which pushed the prices of other major coins down as well. In just 12 hours, the overall cryptocurrency market cap had fallen from $210 billion to $183 billion, losing $27 billion in the process. In November last year.
If Bitcoin continues to fall below $3,500 and possibly to its 12-month low at $3,122, cryptocurrencies with low market caps and daily volumes are expected to experience intensified downward price movements against both Bitcoin and the US dollar.
There has been speculation among analysts regarding the peaks of the crypto. It remains to be seen whether Bitcoin will indeed be able to rise to $40,000 in the current calendar year or not.
The blockchain of Ethereum (ETH) is one of the most useful in the blockchain space, after Bitcoin. A recent analysis of the charts suggests a sharp drop in the price of ETH and the rate of its fall is much higher than the other assets. This downfall has had the investors surprised and is a matter of concern looking at where the digital asset is heading. Tron, a coin that its Chinese founder hopes will challenge the world’s major content providers, such as Facebook and YouTube has also begun to drop its value.
On the other hand, for the cryptocurrency giant Ripple, the bulls have been unable to push Ripple (XRP) above $0.33108. Currently, the bulls are attempting to scale the level again. If this latest recovery attempt fails, a cryptocurrency to drop to $0.27795 is expected.
This downfall could be because of the security loopholes in the finance ecosystem. These attributes have to be given importance for a constant recovery of the crypto market.
How The Crypto Sell Will Help Taxes
Right from Google’s ban on cryptocurrency related ads, the Bitcoin prices have run to an all month low. The volatile cryptocurrency fell by $500 within a six-hour space. If Bitcoin has been purchased and sold within the same year, the person will be taxed on short-term capital gains.
How Will This Affect India?
Cryptocurrencies like Bitcoin are banned in India, but this drop in the crypto market might still affect the country since the second interdisciplinary committee is in favour of legalising it. With more strict rules, this news brings hopes for the cryptocurrencies to enter the Indian market right back. The committee had previously met twice, but there were still ongoing deliberations surrounding it.
“We have already had two meetings. There is a general consensus that cryptocurrency cannot be dismissed as completely illegal. It needs to be legalised with strong riders. Deliberations are on. We will have more clarity soon,” a senior official said. The committee has met twice on the issue and is likely to submit its report to the finance ministry by February 2019.
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Found a way to Data Science and AI though her fascination for Technology. Likes to read, watch football and has an enourmous amount affection for Astrophysics.