Identifying What The Real Reason Behind Bitcoin’s Recent Tumble Could Be: Accumulation Cycle?
What Is The Real Reason Behind Bitcoin's Recent Nosedive?
As many are already aware of, Bitcoin has taken quite a nosedive recently, with its price continuously dropping for over a week now. A significant part of the crypto community has already started thinking that this is it for the number one cryptocurrency. Others, however, remain its supporters, believing that it will bounce back as it usually does.
Similarly to last year's price surge, a confusion of explanations emerged this time as well. Numerous theories are suggesting potential reasons for this type of behavior, ranging from attempts at market manipulation to a whim of crypto whales. Because of that, we will cover the largest potential reasons behind the market crash, and one of them (or all of them combined) will likely be the real one.
1. Tether's Influence
While not the first one around, Tether is still the best-known stablecoin, and as such, it received a lot of attention. However, the coin was also very suspicious for several reasons. Not only did it keep its bank account hidden, and was unable to prove that it can back all of its coins, but it was also suspected of illegally orchestrating Bitcoin's 2017 price surge.
Now, many believe that BTC is losing value due to the fact that the US Justice Department might be closing in on Tether,
2. Craig Wright's Threat
Only days prior to the market crash, as well as BCH upgrade that started the hash war, Craig Wright's plans for taking Bitcoin down for good emerged. The plan basically revolved around getting enough power to take over one blockchain after another, until Bitcoin itself falls victim to this crusade. At the time, many believed this to be an empty threat, even though the supposed plan of attack made sense, in theory.
3. The After-Effect Of The BCH Fork
A sell-off arrived due to BCH hard fork, and while many expected it to be a short-lived thing, it is now speculated that this was a big blow to Bitcoin's basic value. Constantly splitting the chin undermines the value, as there are hints at the fact that something that is replicated time and time again cannot be as valuable as it was previously assumed.
4. Grim Predictions
It is easy to ignore Bitcoin skeptics and those that claim that this is a hellish cryptocurrency that came to destroy the economy. However, voices that claim things like this tend to attract more listeners during difficult periods, which is where we are now. Such apocalyptic predictions are even more damaging when coming from respected institutions and individuals, such as banks and their executives, who are notorious for being anti-crypto most of the time.
5. Bakkt Delay
Many in the crypto community saw Bakkt project as the savior of Bitcoin. Ever since it was announced, many expected this project to launch BTC to new heights, maybe even be the first real step to mass adoption. However, the project was postponed once again and is currently expected to be launched in January. Additional speculations and accusations emerged due to this decision, but that is a topic for another day.
6. Whale Activity
In addition to all of the reasons mentioned above, there is additional evidence that suggests that large entities were obtaining large quantities of BTC during last months, while its value was mostly stable between $6,000 and $6,500. These so-called “whales” are often responsible for different price moves throughout the year, depending on whether they are selling or buying.
While many assume that whales are trying to control the market in a positive way, the truth is that nobody knows what their real goals are. If they wanted to, they could probably knock the BTC value down within minutes, or stimulate is just as easily.
7. Is History Repeating Itself?
A lot of people still remember the video that came out in 2007, featuring a former hedge fund manager and mouthpiece for CNBC Wall Street, Jim Cramer. Cramer made a stunning announcement where he explained different ways that his firm used to manipulate the stock market. Many other companies were suspected of being capable (if not responsible) of doing the same, and this is also possible when it comes to the current situation.
If regulated markets can be so easily manipulated, while the manipulations can remain a secret, who's to say that the unregulated and decentralized crypto market is not constantly manipulated right in front of us. The money invested in it has to go somewhere, and the market is always hungry for more. Decentralization is a good way of preventing something like this, but there is still a lot more work to be done in order to properly establish it. Until that time comes, anything is possible.