Over the last six months, we have seen an incredible amount of volatility in the cryptocurrency space. Towards the end of last summer, and on the back of the Chinese government cracking down on cryptocurrency related activity, the price of many of the major and more established coins in the sector took a real hit – led by bitcoin.
Within a few weeks, however, markets recovered and more, with prices soaring into the end of the year and the flagship BTC trade price reaching just shy of $20,000 a piece.
This didn’t last, unfortunately. As the new year came around, markets took a step back and sentiment weakened substantially. The price of most of the majors declined in line with this sentiment weakening and a self-fulfilling cycle of depreciation pushed price down pretty much across the board.
Right now, BTC goes for around $14,000 – a close to 30% discount on the above-mentioned highs.
The question that everyone is asking is, what comes next?
Anybody who has been in the space for a while already know the answer.
We see a sell-off to this magnitude, it’s primarily representative of consolidation as opposed to a major shift in trajectory. Especially given the fact that price ran out up as it did towards the end of last year, it was almost inevitable that we would see shorter-term operators pull profits off the table and, in turn, price correct relatively substantially. Add in to the equation the fact that CoinMarketCap just removed the South Korean markets from its algorithms and the correction becomes even more apparent.
The answer to what comes next, then, is that we almost certainly going to see an overarching return to the upside subsequent to the current consolidation phase. We have seen it numerous times before at every level over the past five years and there is no indication that this time will be any different – indeed, the opposite is true.
Bottom line, then, is this – stay strong and HODL.
Indeed, if you’ve got some spare capital lying around, pick up some cheap coins. You will be glad you did when price turns around.
Now we wait.