This week turned out to be one of the most unstable ones in 2018 for the world’s #1 cryptocurrency. Its cost has decreased by about $400 literally in 24 hours. Such a collapse could not bypass cryptocurrency community, that was really worried not only about the decrease in the price of BTC, but all the of the other cryptocurrencies in the rating. Why did this happen and what to expect next? Let’s try to understand.
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- Why does Bitcoin and other cryptocurrencies fall?
- How to earn on the difference in the rate of cryptocurrency?
- Forecasts of analysts
Experts note that one of the reasons for the decline in the value of BTC could be the recent hacking of the South Korean trading platform. However, this is not the main factor of the negative rate. There are also such reasons:
The first reason. Enhancing EU control
According to one of the versions, the decrease in the cost of BTC is indirectly related to the initiative from the EU on the topic of regulating cryptocurrency.
The authorities are carefully examining cryptocurrency and blockchain. We reported that the European Parliament supported the creation of a separate organization the main task of which would be to study and analyze the technology of blockchain. Behind the scenes, such a measure is considered a step towards regulating the cryptocurrency world, not a research method.
The second reason. Increased attention of the SEC
Not only Europe, but also the US seeks to keep the field of cryptocurrencies under control.
For example, the Securities and Exchange Commission claims that cryptocurrency exchange are reluctant to adhere to SEC standards.
This means that the regulator will act even stricter while establishing legislative norms for digital money.
Perhaps, the first logical thing that can be done is not to rush with selling. Sometimes a cryptocurrency falls so low that it would seem that only crazy people sit around and calmly watch what is happening. But, supposedly, it is at this time that experienced traders earn money while keeping a cold mind. During all of its existence, Bitcoin has plummeted many times, but almost always restored its value (it almost reached a record $20k mark).
If you want to earn on the difference in rates, then you should definitely:
- Choose a reliable cryptocurrency exchange;
- Determine the most profitable cryptocurrency pairs which you will work with, for example, BTC/USD or BTC/ETH.
- Follow the news and rates. With high volatility, experts do not advise to take any action if you are a beginner and own large investments.
A good solution is to get a comment from a more experienced trader and work only with stable currencies.
As for the technical part, even before the fall of the exchange rate analysts said that if the BTC fell lower than $7k, it would be the first hint that the price will not recover in the nearest future. The remaining cryptocurrencies in the rating, as it often happens, duplicate Bitcoin’s behavior. By the way, according to the latest indexes, Ethereum fell below $500, which is about 10% of the cost according to the data of the trading portal CoinMarketCap.
The volatility of Bitcoin and cryptocurrencies in general is not news for traders and participants of the cryptocurrency community. “Bad times” are coming for cryptocurrency more often, because hackers are getting more sophisticated, and regulators are trying to “tame” the unmanageable asset with new strength. Whatever happens, Bitcoin will hardly lose all its value, and any fluctuations are temporary.
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