The decline that started in the middle of Wednesday, covered the entire Thursday and Friday. According to analysts, a long flat in the range of BUSD 200-220 were expected to continue in November, so the market decline to the level of BUSD 180 was a real surprise for many people. Recently, cryptocurrency investors has entered a long-term investment phase and the drawdown of the total capitalization by more than BUSD 20 (lower bound for the last year) for 24 hours is a warning bell for those who still believe in the quotes growth.
On Friday 16th of November, almost all cryptocurrencies from TOP-100 was continuing to lose their value. The exceptions were only Tether and some of coins located closer to the edge of the first hundred of Coin Market Cap rating (Factom, ODEM). Over two previous days, BTC has lost more than USD 70, causing a snowball effect for the rest of the market. As at 17.11, its price is in the range of USD 5500-5600 and its share in the total capitalization remains at the same level (52.9% - 5301%), indicating the proportionately equal decline of the cost of all the main cryptocurrencies.
There are no objective reasons for quotes to fall down (or at least they are not announced). Analysts think that the reason is the BTC rate drawdown, followed by the rest of the market, but the decline of the ВТС price is just a consequence. Randomly, this drawdown lined up with the conducted on 15th of November hard-fork of Bitcoin Cash, holding the 4th spot in the capitalization level. But, from a logical point of view, ВСН cannot be a reason of the collapse for several reasons:
- Cryptocurrency market is quite closed. Money can flow from one coin to another before the hard-fork. But we see a global recession.
- ВСН in comparison with ВТС is less popular and has less impact on the market.
- The division of ВСН has been known for a long time, so this news couldn’t have such a sharp impact on quotes.
So far we can make only one assumption: the cryptocurrency market is now entirely in the hands of institutional speculators, who benefit from the price volatility. Once the fall of ВТС lower than the psychological mark of USD 5800-6000, miners will leave the market, because for them the price of Bitcoin has declined lower that its mining cost. It shows that the market has emerged from an equilibrium state and is now going to continue its descending movement.
But it is still early to say that cryptocurrencies become irrelevant. It is worth recalling that cryptocurrencies were at the peak of their popularity in 2017 and, for example, the capitalization level in the early September was BUSD 165-170. So this market still has some place to setback, and there is still a possibility that large investors, responsible for this collapse, will enter the market in its lower part, thus reversing quotes once again, as happened during the summer 2017.
What should investors do?
- Rely on the further quotes decline, which will definitely continue not only during the next week, but until mid-December (before the holidays, during which the trading activity decreases significantly).
- Try to earn some money on individual venture cryptocurrencies and ICO used for so-called Pump&Dump strategy.
The above diagram shows quotes of the cryptocurrency listed in TOP-100 that, at the moment of the total market collapse on 15th and 16ht of November, has on the contrary increased. You can earn on ICO by investing your money on PreSale stage and by quickly selling a token at the moment of its first appearance on stock houses.