Bitcoin and Ethereum see massive corrections after record prices
You know how the saying goes, "What goes up must come down." It also holds true in the case of top cryptocurrencies Bitcoin and Ethereum, which after reaching record levels this week, are now seeing massive corrections.
Bitcoin, which reached a high of 3,000 just a few days ago, is now trading for just over $2,250 on the major exchanges. Ethereum, which is expected to overtake Bitcoin in the coming period, saw its price drop from $400 to around $310. And it is not just the two cryptocurrencies that are suffering.
The whole cryptocurrency market is down, mainly because Bitcoin and Ethereum make up around 70 percent of the market cap and also due to Bitcoin's influence on the other coins. That includes Ethereum, despite its recent growth spurt.
The price of Ethereum is expected -- at least in part -- to be dictated by Bitcoin until it manages to rise above it. When that may happen remains to be seen, but the ETH/BTC ratio is holding at around 1.3. At Ethereum's peak it was well above 1.5.
The price of Ethereum is not expected to drop significantly in the coming period, and neither is the price of Bitcoin, based on reports from analysts. I am not going to make any buying or selling recommendations, because the market is too volatile at this stage. It could go either way, so keep that in mind before deciding to invest.
If I can give you one piece of advice, do not panic at this stage if you have investments in Bitcoin and Ethereum. Price corrections are a given in the cryptocurrency market, even as high as these are. They were bound to happen at some point.
As the market dropped by such a large amount in a short period of time, it could just as well bounce back to near-record levels in the coming days. That's the beauty in its volatility and why it is so easy to make (and lose) money trading cryptocurrency.
I should add that the correction prices mentioned above are around the time of writing this article, so they may vary -- in either direction -- when you check the major exchanges.
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