The crypto rally is over as market enters correction
Fueled by Bitcoin, Ethereum, Bitcoin Cash and other major players, the crypto market hit a new all-time-high yesterday, reaching a valuation of over $345 billion. But, as the saying goes, what goes up must come down. So, as the incredible rally finally came to an end, the market started to crash, big time.
This is not uncommon for the crypto scene. This year we have seen three similar crashes happening. All coincided with Bitcoin setting a new price record. This one is no different, as the market entered a correction right after the most-valuable cryptocurrency broke $11,500, sending it back into the low-$9,000s.
Analysts have predicted a crash for a few days now, as all the major coins have posted huge gains since the last correction took place, in early-November. That was not, however, as broad as the one that followed its mid-June peak of $3,000, which lasted well into August.
To understand how much Bitcoin has grown, you only have to look at its most-recent low on November 12. At the time, it dropped to $5,500. And, in just over two weeks, Bitcoin more than doubled in price. Its market cap for November 12 (not the lowest that day, though) was $99 billion. Yesterday, it peaked at $192.44 billion.
Ethereum, which continues to hold above $400 at the time of writing this article, peaked at over $520 yesterday. Its market cap was over $46 billion. Bitcoin Cash, which traded at a high of 1,670 the other day, now sits at $1,246. Prices are likely to vary throughout the day, so keep that in mind as you look at aggregated data on websites like Coinmarketcap.
No one really knows just how deep this correction will be, but some analysts expect the price of Bitcoin to drop by at least 30 percent from the peak. That is reasonable, based on historical data, but whether it will go as low as $8,000, or drop even further than that, remains to be seen in the following period.
Along with Bitcoin, all the major cryptocurrencies should see some pullback. As I am looking at the top 100, the only listings which are not in the red are Tether (which is tied to the value of the US dollar) and Achain. The latter is barely up though, with only 1.02 percent gained day-over-day.
Investors who have waited patiently for this correction can benefit greatly. Assuming that Bitcoin drops to $8,000 (which, again, is a sensible target), it recovers and starts gaining again, there is a very good chance that they can be looking at a return of at least 100 percent in 2018. Some predict that Bitcoin will hit a price of $20,000 by the end of next year.
And, if people continue to pour money into it, that is entirely plausible. After all, few expected Bitcoin to go over $3,000 in 2017, let alone $11,500. So, in that sense, a rise of just 74 percent in a year sounds like an easy job, when this year it rose by over 1000 percent.
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