Crypto Market Crashes Again: Recap Of Bitcoin’s Week, What Happened And What To Do Now?
The crypto space has recently experienced another big market crash, and the situation has not improved for days, now. The industry is struggling to start a new period of recovery, traders are confused by these events and don't know what to do, while the cryptocurrencies themselves continue to lose value.
Two major questions are being asked over and over again for days now — what happened, and what to do next? This is what we will explain now, and hopefully be able to come to certain conclusions.
The Crypto Market Crash Of November 2018
The market crash started on November 14th, and Bitcoin's value dropped to its lowest point in 2018. For the most part of the year, Bitcoin kept a value of around $6,400. Its price dropped below $6,000 only once, and even then, it did not go lower than $5,800. However, on November 14th, it finally happened, and BTC dropped down to $5,500.
The drop came without warning, and it took a lot of investors by surprise. Other coins followed, and the coin without a 10% drop within the top 100 cryptos became a rare sight. The entire market cap dropped by nearly $30 billion, after a while, and the situation has yet to improve.
At this point, Bitcoin started resisting, and it managed to prevent the further drop. However, this did not last long, as the drop continued on November 15, when BTC hit $5,358. This was its lowest point since October 2017, and many started speculating what will happen next. Will Bitcoin resist, or is this a start of a free fall that will take away all of its value?
On November 16, the situation started to change, but only slightly. While optimistic investors expected a value surge that will return cryptos to their former prices, nothing like that has happened yet. However, Bitcoin did manage to resist once more, and to return its value to $5,500 and above. During the chaos, one of the cryptocurrencies that managed to advance in a way is XRP, formerly known as Ripple.
XRP managed to once again replace Ethereum as the second largest coin by market cap. This is the third time in the last several months that this has happened. While Ethereum usually took the spot back within a few hours during the first two events, this time, XRP is holding its own for a few days now.
The situation with Bitcoin and other altcoins remains pretty much the same even now, on November 17th. Bitcoin's current price is at $5,548, with a slight drop in the last 24 hours, while Ethereum remains bested by XRP. Now that we are aware of this, it is time to talk about the cause of all the chaos.
Why Did The Market Crash?
The answer to this is not as simple as one direct reason. Instead, there are multiple factors that have played their role in bringing the market to the state in which it is right now. One such factor is the behavior of investors themselves. Due to reasons such as panic, uncertainty, and fear of losing money, investors can massively start selling or buying, depending on the situation.
When combined with the fact that cryptocurrencies have nothing to support them and give them value except for the people, if people start selling or buying, the value reacts.
Finally, there is the fact that Bitcoin is known for being the leader and largest influencer on the entire market. It holds half of the total market cap, and on multiple situations, it was even known for holding more than half. As such, it influences other altcoins, which lose or gain value with it.
Considering all of this, it is not surprising that all altcoins dropped as much as BTC after the hard fork of Bitcoin Cash. Numerous rumors and expectation of a scandal during the BCH November 15 upgrade were making investors uneasy and anxious for weeks, if not months prior to the event itself. All of this resulted in a market crash an entire day before the process involving BCH even started.
In other words, it is not about cryptocurrencies — it is about the people. Investors' fear and lack of faith in crypto is what caused it to drop.
What Will Happen Next?
According to experts, the situation will change, and cryptos will eventually return to the previous state of things. However, as for what to do now, that depends on each individual investor. Cryptocurrencies will continue to rise and fall in cycles, as they usually do. They are still very unstable, which is why high volatility is such a big issue.
While their system is decentralized, and no one is in charge, that also means that there is no one who can manage situations like this. In a while, after the fear dies down, investors will start trading and buying coins again. Cryptos will strengthen their positions, and the current drop will not affect regular traders.
The ones that will likely suffer the most are businesses. and especially crypto miners. Mining cryptos can be quite expensive, but that too depends on multiple things. However, since it is so expensive, miners depend on the crypto value being as high as possible. With a drop in value, their gains might actually be lower than the cost of mining.