Action over the last few days in the cryptocurrency space has been incredibly volatile. We have seen the price of many of the major coins dip considerably, in some cases as much as 40%, and this has translated to an overarching weakness in sentiment which, as is always the case in this sort of situation, has compounded the downside action and pushed the price of most coins lower than any fundamental developments might warrant.
Take Ripple (XRP) as an example.
Just a few days ago, Ripple traded for more than $3.60 per token. During the session yesterday, this had dipped to less than $1.90 apiece – a near 50% decline across the period.
There is something that many people are talking about, however, and it’s incredibly important for those both within and outside of the cryptocurrency space to recognize in order for said individuals to form an informed bias as to what’s happening right now in the markets.
What are we talking about?
Well, at the start of this week, leading coin aggregator CoinMarketCap, without warning, removed South Korean exchanges from its pricing calculations. Pretty much across the board, South Korean exchanges priced cryptocurrencies at a 30% premium to exchanges spread across the globe so, naturally, with this 30% priced out by CoinMarketCap’s algorithms, it’s going to look as though things have taken a dip when in reality it’s purely an accounting alteration as opposed to anything fundamental.
The problem is, however, that when this happened, markets saw it as a shift in sentiment (driven by something fundamental, even though it wasn’t) and sold off further on the coins that were falling (or at least, appeared to be falling) on the back the news.
What does all this mean?
Well, it might serve up something of an opportunity.
Once markets click as to what’s happened, we should see a bottoming out of the overarching decline and, in turn, a return to the upside momentum in many of the points that are taken hits over the last few days. As such, at current pricing, most of the majors (and especially Ripple) represent cheap entry points in anticipation of a recovery.