Anyone glancing at their Blockfolio app on Tuesday morning would have been in for a rude awakening. With every single cryptocurrency drowning in a sea of red, newcomers could have been forgiven for feeling a little queasy. A drama-filled day, dominated by negative news from South Korea and China, saw bitcoin fleetingly kiss four figures on some exchanges before rebounding sharply. On Wednesday, BTC fell to $10k once again, joining altcoins that are mired in the red.
Bitcoin Hits Rock Bottom
2018 is scarcely older than a fortnight and already it’s shaping up to be more action-packed, exhilarating, and occasionally terrifying than the previous year. To date January has witnessed the rise of vaporware, billion dollar market caps gained and lost, and XRP rise up to threaten The Rippening before slinking back to its corner. At its lowest point on Tuesday, Ripple came close to the dollar mark, down 65% from its January high.
While some traders panic sold and others hodled for dear life, a few tried to ride the waves that saw bitcoin buffeted every which way. At least one trader called it right, noting the previous support line that bitcoin would bounce off, and so it proved to be. 100 million tethers were released into the fray in what one trader dubbed crypto’s “quantitive easing”, unleashing a green candle that temporarily spared bitcoin’s blushes. Despite clawing its way back over $11k and holding $11,200 for a few hours, as of Wednesday 9am (NYT), BTC is close to four figures once more.
Altcoins haven’t fared so well either. Just three of the cryptocurrency top 100 posted gains on Tuesday – or four including tether – with Quantstamp, Neblio, and Ethos the only winners. Bitcoin finished the day down 15%, whereas alts such as Verge, Ripple, and Tron all shed over 20% of their value. Tron, which once occupied a spot in the top five, is now down to 14th and fading fast.
New Year, New Low
Bitcoin is a capricious beast at the best of times, but it’s been more erratic than ever since the turn of the year. Rumors of a South Korean crypto crackdown have proliferated for weeks, but thus far they’ve been just that. Trying to dampen the nation’s enthusiasm for cryptocurrency – a movement that as many as 1 in 25 South Koreans are believed to be actively involved in – will require more than the disapproval of a few ministers.
As news.Bitcoin.com recently observed:
Cryptocurrencies have been threatened at one point or another by nearly every country on the planet. Rarely does a government venture beyond rhetoric…Be they communist strongholds or liberal democracies, bitcoin cannot be stopped.
For so long as the Asian markets dominate bitcoin trading volume, South Korea, Japan, and China will serve as the tail that wags the dog. Like it or not, westerners are beholden to the movement of markets beyond their reach, and there is little they can do to mitigate that during spells of uncertainty other than to migrate into the safety of USD tethers and wait it out.
Neo Goes Loco
It seems fitting that a coin named Neo should start the new year with its greatest run to date. On Monday it was the only asset in the cryptocurrency top 100 to be in the green. Despite dipping since, Neo, together with Gas, the fuel used to run smart contracts on the network, has been a rare ray of light amidst the doom and gloom. The “Chinese Ethereum” is finally proving its worth, with a string of ICOs launching on the network this month, and a level of side-chain and ecosystem developments in the works that are justifying Neo’s newfound valuation.
In 2017, there were just two major Neo ICOS, for Qlink and Red Pulse. 2018, in comparison, has 20 penciled in already. Ethereum, January’s other consistent performer in the crypto top 10, has similarly been buoyed by the spate of ICOs in the works. Token Data reports that $570 million was raised by 23 ICOs in the first two weeks of 2018, and a total of 60 token sales are launching this week – the highest level since October.
If historical indicators are anything to go by, bitcoin will rally and finish the month higher than it began before going on to enjoy another bumper year. There may be more pain to endure though before the clouds lift and bitcoin can start eyeing another all-time high. Ari Paul’s prediction, ventured last week, might not be so outlandish after all:
What do you think is the main reason for bitcoin dipping this week? Let us know in the comments section below.
Images courtesy of Shutterstock, @CryptOrca, and Coinmarketcap.
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Author: Kai Sedgwick