The Crypto market is trading at a much lower value than what it was trading a month ago. The drop in cryptocurrency values last September has continued into October and has seen its lowest levels since February 2018. By seeing the recent charts, you can understand how the dips have generated much interest among traders.
Here we will cover three critical factors that can be attributed as causes for such declining performance: Technology-wise, regulation-wise & liquidity-wise. We will also provide insight into what other trends have been witnessed that may get back some of those lost investments.
Technical-wise
The first point of interest is the low trading volumes. BTC’s daily volume has dropped by 10 percent in the past month, while ETH and XRP have lost more than 20 percent. The same trend is also repeated on the weekly charts, where a 10 percent drop in volumes was recorded for BTC & XRP. While for EOS and TRX, volumes have gone up by about 6 percent and 4 percent, respectively.
This means that market participants are getting more selective with choosing cryptocurrencies to invest in than what they were doing during February 2018, when bitcoins were soaring upwards to above the $20k mark before crashing in mid-March 2018. Also, there has been a general dip in volumes; the price has followed suit and dropped by about 10 percent.
Digging deeper into the technical
As we move closer to October 2018, sentiment has dipped to some extent, and so can people get started. This can well be attributed to several factors, including the halving of bitcoin halving, which is scheduled for the end of November 2018. This could cause a rise in interest temporarily but at the same time make investors more cautious about investing in bitcoins too heavily because one might be missing out on buying at higher prices in both short and long-term periods. The slack-off in volumes noted during September 2018 onward also indicates that participation is not good compared to previous months.
Regulation wise
The US SEC has had something to say about this. They have laid down regulations that aim to bring cryptocurrencies under their scrutiny. In the past couple of weeks, the price of bitcoin has been dropping after the SEC decided against approving a bitcoin ETF for the second time. The goal behind ETF is to make digital currencies more accessible to mainstream investors and also be more easily traded, especially in the United States.
Liquidity wise
The numbers of crypto exchanges have been fluctuating a lot. Another exchange will pop up and take away the supply when you thought it was going down. Coinbase, Gemini & Bittrex are some of the most preferred exchanges amongst traders worldwide. Still, they cannot cope with everyone’s demand simultaneously as they can limit trade volumes or even terminate an account based on suspicious trading activities. For better insight, you can go through this software’s official site.
Also, crypto exchanges are not very popular among investors who prefer to keep their assets on offline wallets rather than somewhere online. The case for offline wallets is made even stronger because we have witnessed so many crypto exchange hacks in the past. With this, investors rather lose their assets through hacking instead of taking them away from their accounts by a crypto exchange.
Factors that will drive the market back to growth
The fact that bitcoin has survived every dip it has encountered has shown us that it is not hyped anymore but rather an emerging technology whose time has come to rule this world. It is fast, secure & decentralized. The rise in value directly depends upon the popularity, and many investors are willing to put their money into this incredible technology.
The SEC’s announcement that they are still looking into the crypto market has shown us that there is a possibility for development in this market. What better way than to trade over-the-counter (OTC) & exchange platform (ETP)? Using an ETP will make trading feel safe, stress-free & more genuine at the same time as it will put you under more control rather than having to worry about hacks on exchanges. Tracking the price of bitcoin on an OTC exchange will also make you more confident about entering the market, and also, you can be more selective with what size of the investment you are willing to put in.
