Why is Crypto Market Stalling

Over the past 10 months or so, the crypto market has been in a constant downward movement. Bitcoin peaked in December last year and has been under the $10,000 mark for over eight months already. A few sudden drops below $6,000 occurred, but buyers were quick to react and buy all the coins up to the infamous $6k threshold, which pumped the price up in no time.

Other than a constant downward movement on a weekly graph and a few ups and downs on daily and 4-hour charts, nothing worth mentioning has happened. Let’s see why is that happening, looking from the perspective of those looking to buy, but also those who are willing to either hold or sell their assets.

Many investors already think that the crypto bubble has popped, just like the dotcom bubble did over 25 years ago. The fact, however, that only 1-2% of people are actually using Bitcoin or any other cryptocurrency makes this assumption unlikely to be true.

Market Saturation

After reaching the all-time high of almost $20,000, Bitcoin’s price started to fall on December 17, 2017. However, the overall market cap kept going up, as the initial drop in Bitcoin’s price happened because the holders were using it to buy other coins and tokens (the so-called “alt-coins”).

The market was so pumped that even the biggest experts in the economy field and both the stock and crypto trading fields were caught by surprise. This prompted people to eventually begin selling off their alts. Instead of selling for Bitcoin, however, they traded the majority of it for fiat currencies, cashing out and taking massive profits.

Too many people were selling, while only a few buyers were willing to buy at such high prices. As we can see by the price that’s almost identical for over a month already, the market has calmed down, and it might be safe to say that this is the real current value of Bitcoin and other cryptocurrencies.

Bitcoin ETFs

If you are not familiar with exchange-traded funds (ETFs), here’s a simplified definition – ETFs track the value of a specific asset (in our case Bitcoin) and make it possible for the investor to diversify the investments, without actually owning the asset. Bitcoin ETFs would simplify the process of buying, storing, and selling the coin for investors, allowing them to make purchases and sales a lot quicker and easier. This would, without a doubt, attract a lot of new investors, ranging from regular people to multi-millionaire players.

What’s even more important is that people from all over the world were expecting to see what the US Securities and Exchange Commission has to say for months, as they were the ones deciding whether Bitcoin ETFs are going live or not.

Even though SEC rejected the request from Winklevoss brothers – who are the founders and owners of the Gemini cryptocurrency exchange – the first time they applied, people still had some hope. However, after the second rejection on June 26 this year, the price tanked down even more.

As the community considered ETFs’ approval to be the only way out of the bear market, not much is going to happen until we hear something different from SEC. The last time SEC turned down ETFs was at the end of August, which is when the market value came down a little bit and remained the same ever since.

Market Cycle

Many of you have already seen the comparison between Wall Street’s market cycle cheat-sheet and Bitcoin’s graphics. When set to a daily or even 4-hour time frames, stretched out to five or more years in the past, and put over Wall Street’s scheme, it seems that Bitcoin’s price movement is perfectly following the pattern.

What’s even more interesting is that this comparison was valid back in 2013 when we have seen the first massive drop in value, which prevented Bitcoin’s value from increasing for more than two years.

That was the first cycle we have witnessed, and it seems to repeat itself now, except that things are moving a lot faster due to a larger volume. Experts say that we are currently in the last stage of the cycle called “depression”, which leads to a prolonged stagnation at the bottom until interest rises once again.

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