Looking at Bitcoin’s price fluctuations over the past few months can strike fear in the hearts of investors. It’s interesting how the digital asset has come full circle. In November 2017, people were astonished after reaching the $8,000 milestone. Shortly after, it hit an all-time high of $20,000. Right now, though, the price hovers around the $7,000 to $8,000 mark.
Because of these numbers, it’s not difficult to see why investors could have different perceptions on how to gauge the direction of the market. Talks are circulating online that Bitcoin could even go lower than $6,000. Trader confidence isn’t at its best right now, particularly those who are new in the realm of cryptocurrencies.
Traders in the know, however, prove to be less concerned about these price fluctuations. If you don’t know much about crypto, it’s easy for the Bitcoin fluctuations to get to you, influencing your investment decisions for better or worse. Long-time investors explain that the current dip in price should be viewed in a positive light, especially when considering the bigger picture.
Still, it couldn’t be helped if some investors think that market manipulation is responsible for these movements in price.
An Expected Correction
One of the reasons why concern looms over the crypto market is the fact that many people have only entered the market in the last quarter of 2017. Many tried to ride the waves when Bitcoin’s price was rapidly increasing in December. And then when the price started to decline, the new investors who didn’t withdraw their gains thought something must be wrong with the market itself.
It pays to remember that when Bitcoin hit an all-time-high, the adoption rate was at its peak. Coinbase even reported that they added 100,000 subscribers in a single day back in November. Everybody wants to jump ship, increasing the demand for virtual coins. New investors were quick to enter the market and learn how to trade using crypto robots like Bitcoin Trader. This led to an unfathomable increase in value, one that broke out of the expected volatility range.
The parabolic run of Q4 2017, however, isn’t natural. After breaking out of the volatility range, a correction is to be expected. Right now, crypto trading experts explain that the price has returned to its natural range, meaning there’s no need to worry despite the significant decrease in value.
Steady Growth
Many investors are looking forward to seeing the growth of Bitcoin’s value in the latter half of the year. Although nothing seems to be happening, adoption rates continue to increase. The regulatory concerns have also caused prices to go down, but the cryptocurrency market has shown incredible resiliency despite attempts by the authorities to regulate it in one way or another.
Bitcoin’s price reacts to both positive and negative news, but there hasn’t been a ton of positive news as of late. This doesn’t mean, however, that the developers of different virtual coins aren’t hard at work. New technologies are constantly being leveraged to improve the use cases of Bitcoin and other tokens. After a sprinkle of positive news, a spike in price should follow.
Go Beyond Price
It’s hard not to check crypto prices daily. You can do so, but not to the point that it’s the only data point against which you measure the success of the digital coins you have in your portfolio. You should not focus your attention on the discrepancy in price between the December 2017 all-time-high and the current price. Instead, try zooming out a bit and look at the crypto-market in its entirety.
When you look at the charts, spend some time evaluating the total market cap of all digital assets. You’ll find that it’s 330 percent higher over the last year. Sure, the total market cap was even higher during the peak, but this still proves to be an impressive growth rate for any investment vehicle.
What about all those talks about bursting the bubble? Back in May 2017 when Bitcoin was valued at a little over $2,000, people were already saying that the price was too high and that the bubble would burst soon. Today, the price hovers around $7000 and people still say the same thing.
The Manipulation Effect
How you perceive the market influences your future trading and investment decisions. But just as important is understanding the possibility of manipulating the market to control the price of digital assets. If you’re not new to trading, then you’ve probably heard of “whales” or people with large sums of money dumping millions of dollars in a coin to create selling pressure. Inevitably, the market capitulates, and the same whales buy back the coins for considerably less than they initially paid for them.
The government continues to investigate traders who have the means to manipulate the prices of Bitcoin and other digital currencies.
No Need to Panic
Many people still think that Bitcoin is a scam. Others, meanwhile, fear that its price may drop to zero at one point or another. But thanks to the adoption of blockchain technology and cryptocurrency in general, these misconceptions and fears are starting to fade. Some of the biggest corporations such as Microsoft, Amazon, and even governments and banking institutions have recognized the immense potential of the technology, which means it’s not going anywhere anytime soon.
The price volatility can be brutal, but it only tells part of the store. Looking at the bigger picture and realizing the steady growth of the cryptocurrency market proves worthier of your time and attention.
