5 reasons why you should not worry about the January drop in the price of the cryptocurrency market

5 reasons why you should not worry about the January drop in the price of the cryptocurrency market

The cryptocurrency markets include more people than ever. So fear, uncertainty and doubt increasingly influence price fluctuations.

Novice traders come in and out on a wave of hype in social media, as panic selling cause of what happened in the last few days. However, on the basis of archival cryptocurrency charts, this is the January price drop is not something new.

The market decline in January has a number of reasons. It may come from Asia, where there are massive trades with cryptocurrencies. According to Coinmarketcap, which no longer includes the South Korean stock exchange, the total market capitalization of all cryptocurrencies fell from 750 to 420 billion dollars over the next four days. At the time of writing, the cryptocurrency rebounded and started to grow again. At the moment capitalization is around 575 billion us dollars.

Fear, uncertainty, doubt, and syndrome of loss of profits

Reason # 1: Many of the impulses for changes in the price of the cryptocurrency comes from Asia, where in recent weeks, not good news. China is constantly trying to suppress the entire industry, and South Korea can not be determined with the hype around regulation and escalating panic around the ban, the reasons for which appear almost every week. The FUD (fear, uncertainty and doubt) as infectious as FOMO syndrome (loss of profits). Therefore, due to panic selling in the last few days all cryptocurrencies felt the fall, some of them lost up to 40% of the cost.

But if you look at the archived charts of bitcoin, you may find that this January sale has already happened, with it several times. Bitcoin is the gold standard of cryptocurrencies. And many altcoins at the time didn’t even exist.

The catalysts of the collapse

Reason # 2: it is Assumed that one of the factors that caused this situation, is the Chinese New Year, which usually falls on February. This time of year when people go on vacation and are traveling to see family. For this they need Fiat money, not cryptocurrency. Since Asian countries are responsible for the lion’s share of the cryptocurrency trading, there is every reason to believe that this may affect the annual sale.

Reason # 3: Another factor can be considered the approach of the end of the accounting year of tax when the investors plan to pay annual taxes. This is also done in Fiat money, not cryptocurrency. Although not the only catalyst, but it may in some way affect the price changes.

Reason # 4: Completion of the first ever futures contract to bitcoins could also have an impact on the reduction of assets traders. With the involvement of big players like the CBOE and the CME, institutional investors can manipulate small markets. This can continue until the situation stabilizes.

Reason # 5: Fluctuations of graphs will increase as more and more new and inexperienced traders to the market. The situation is slightly stabiliziruemost when they realize that this is a natural cycle and cryptocurrency alive. Despite the fact that total market investing in bitcoin has grown over 2500% in less than a year, we are still in the early stage of what could become a revolutionary industry.

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