The crypto market is currently losing another $7 billion as Bitcoin and the entire Altcoin market continues to struggle to gain stability. We address the question of why the crypto market is currently unstable.
So far everyone knows that Bitcoin is the most important trading pair that can be traded with any other crypto currency or token on most major exchanges. If the price of Bitcoin increases, the other coins and tokens usually rise as well, and sometimes even outperform Bitcoin itself in price. The same is true if the price of Bitcoin falls. For those who want to serve the market, this volatility is very gratifying, but the smaller investors are often pushed out of the market. There are three main reasons why the crypto market has suffered a slump recently, despite the hype surrounding the imminent halving of Bitcoin.
1. Bitcoin Gambling
Currently there is a decline in bitcoin gambling, which is a big part of the industry. Gamblers can bet with BTC on many different leagues and have done so a lot in the past. To get an overview, visit https://www.bestbitcoinbetting.com/leagues/.
2. Chinese New Year
The Chinese New Year celebration begins in two days, then all of China will celebrate with great success.
It will be the year of the rattlesnake. The Chinese market is one of the largest crypto markets in the world, although crypto trade is prohibited within China. As long as many Chinese traders are able to continue trading in the South Korean and Japanese crypto markets, they can circumvent the ban domestically.
According to Arthur Hayes of Bitmex, the trading exchange with the largest volume of Bitcoins, we expect a sharp drop in Bitcoin price and trading volume when the Chinese New Year begins. This is due to the influence of Chinese traders who are a few days away from the crypt to celebrate the New Year.
Over the last 24 hours, the Bitcoin price has already dropped by 2.6% and there are still two days until the celebrations begin. If this year is in any way consistent with previous years, the forecast could be correct.
3. February is a bearish month for Krypto
So far, the first quarter has always been a downward trend for Bitcoin.
Since Bitcoin is the original crypto asset and market leader, any other crypto currency correlates strongly with it. Almost every second crypto currency is traded against Bitcoin on every major exchange, which means that it is affected by price changes.
4. Accumulation with Bitcoin
Two analysts, Tuur Demeester of Adamant Capital and Willy Woo of Adaptive Capital, emphasize that Bitcoin is currently in a strong accumulation with institutional investors.
They each make a compelling argument that hedge funds and Bitcoin whales are using “sell walls” to maintain the price of Bitcoin within a $6000-8000 price range in order to get as many shares of Bitcoin as possible before the May cut in half.
As soon as the price comes under price pressure due to the additional scarcity of a reduced block reward for miners, the first two Bitcoin successes should trigger a massive price increase. Another indicator of Bitcoin development is the price pressure on the existing Bitcoin supply. During the last halving we have seen Bitcoin rise to an all-time high of $19,891. For many investors it is clear that the upcoming halving will have a similar effect on the price.