The last couple of weeks has seen a price dip that has only shown any signs of flatlining today. This has led to many traders and the general public alike, to speculate about this being a one-off calamity or the natural course corrections of the market based on historical precedence. For those who see the glass as half full, the good news is that it is the latter.
While many are concerned about the price pressure on Bitcoin, currently this negative thrust is not new. The ridges and troughs are part and parcel of any market and the cycle tends to repeat itself, with the market hitting a peak and then compressing before regaining momentum.
5 Previous Bitcoin Crashes
2011: The world was blissfully unaware about the impending doom of humanity; after all the Mayans had stopped making calendars for the year after. Yet, there were those who didn't worry about such things but were more focused on this very novel concept of a Bitcoin, saw its meteoric rise. This was a 3000 percent increase from a value hovering around $1 in April to $31 in July. After those heady days, by December the prices had dropped back to $2, a sharp decline of over 90% in the span of just a few months.
2013: While much of the world was adoring the birth of Prince George there were a whole heap of unhappy investors. After the steady climb to $266 in April, BTC regressed to $100 in just over two months. However, this time when the markets bounced back the prices crossed the $1000 threshold for the very first time. By November they were cozy at the $1,200 mark.
2014: Whilst the year might be more remembered for the conflict in Isreal or Ukraine, the crypto verse was fighting off incorrect information that China had banned all cryptos within its borders. This sent the market into a bit of a panic and the prices quickly dropped to $340 in April. Once the facts were established the prices did pick up again. However, the valuation remained fluctuating and stayed at the lower end of the $300 mark well into the following year.
September 2017: On to recent memory, last year was a roller coaster ride for the crypto. With Steam declining to accept it as a payment option and China's bitcoin ICO and exchange crackdown, the clouds looked ominous. From crossing the $5,000 threshold to crashing to $2,900, all in less than 2 weeks. This was short lived and the market rebounded in a month to surge past $5500.
December 2017: This was the high watermark for both the believers and skeptics. While the value of a Bitcoin reached its zenith on 15th December, at $17900; it quickly petered off, in a week, to $1390. In fact, the volatility was laid bare when the prices dropped nearly 50% in a 24 hr trade cycle. Since then Bitcoin has continued to drop off.
History has a habit of repeating itself, one would do well to learn the lessons she has to offer. Given all of these historic declines, it is interesting to note that that the worst bear trend lasted for more than twice the current slump, that puts the 9-month downturn into perspective. As of now, it seems this trend is set to continue, however as proved time and again, bad times never last. Surely, once the market bottoms out and a stable support value is reached, it will bounce back. The only question is can the average trader stay calm?