As of this writing, the price of bitcoin was down 8%.
One major reason for this price correction is that people are switching from BTC to other cryptocurrency such as LTC, ETH and Dash, as we can see in the increase trading volume of the said coins.
This is from Bittrex
This is from GDAX
As you might conclude from this trade volumes, the population that currently wants to enter the cryptocurrency world is finding it difficult to transfer their recently purchase bitcoin to these exchanges because of the very high transaction fee.
As more and more people become aware of this problem they will soon realize that Bitcoin is overvalued and will switch to different cryptocurrency.
This 2018 will be a time to grow for Ethereum and Litecoin as they have the technology to handle these massive transactions. If you are just now investing in Cryptocurrency I suggest don't start with Bitcoin.
Bitcoin increased its value at 17000 USD without solving its scalability issue. No new technology is being develop yet the valuation of BTC is still going up. The driving factor of this price movement is only the demand for the BTC, these new investors just want to get on to the cryptocurrency hype train without understanding the technology of blockchain.
These whales that are holding Bitcoin, knows that BTC technology is really outdated compared to other cryptocurrency but once they got a hold of these Bitcoin Futures offered by the CME (to hedge their bets) they will dump majority of their Bitcoin holdings just like the Dutch did in the tulip mania in the 1600s. The major loser of this inevitable crash are those who bought BTC too late.
Thank you for reading. Please share your thoughts in the comment section.
I agree that the recent correction is due to people investing in other coins. People will see Bitcoin's current price and be back within a week after profiting from ETH or LTC. It's the natural ebb and flow of the market and it's still on too much of rise to call an 8% correction, a crash.
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Yes I agree, but we know that bitcoin should be not valued at 17000 usd. Thanks for the input :)
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