Why is All Crypto Down?

Why is All Crypto Down?

The crypto markets have been on a roller coaster ride over the past few weeks. After a strong start to the year, prices have come crashing down, with Bitcoin losing over 50% of its value since mid-January. So, what’s going on?

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Reasons for the dip

The global financial market

Cryptocurrencies are down because the global financial market is down.

The global stock market is down because of the Coronavirus. The Coronavirus has caused a decrease in global trade and an increase in risk aversion. This has lead to a sell-off in stocks, commodities, and cryptos.

Bitcoin’s market dominance

Bitcoin’s market dominance is the percentage of the total market capitalization of all cryptocurrencies that Bitcoin comprises.

As of writing this, Bitcoin’s market dominance is dipping below 50% for the first time since 2017. This metric is important because it gives insight into which digital asset is leading the pack in terms of price action and overall strength.

There are a few potential reasons for this dip in Bitcoin’s market dominance:

1) The altcoin season – This is when cryptos other than Bitcoin experience strong rallies while Bitcoin’s price stalls or declines. This usually happens when investors get excited about a new project or sector and start buying up altcoins en masse. The result is that altcoins’ prices increase while Bitcoin’s price falls in relative terms.

2) The institutional investment effect – We’ve seen an influx of institutional investors entering the cryptocurrency space in recent months. These big players are generally more interested in investing in projects other than Bitcoin, which could explain the recent dip in Bitcoin’s market dominance.

3) Economic uncertainty – With the COVID-19 pandemic raging on and global economies still in flux, some investors may be losing faith in Bitcoin as a safe haven asset. Instead, they could be opting to invest their money in more stable assets such as gold or government bonds.

Whatever the reasons for Bitcoin’s current dip in market dominance, it will be interesting to see how long it lasts and what implications it has for the wider cryptocurrency industry.

When will the market turn around?

Many experts have been asked this question and there is no certain answer. The market is unpredictable. However, there are a few theories as to why all crypto is down. One reason could be because the market is reaching a saturation point. Too many people are invested in crypto and not enough are buying.

The global financial market

The current state of the crypto market is unclear. Since reaching an all-time high in December of 2017, the market has been on a steady decline. This has caused many people to panic and wonder when the market will turn around. Unfortunately, there is no clear answer.

The reason for the decline is largely due to the fact that the majority of investors are simply speculators. They are not interested in using or developing blockchain technology, but are only concerned with making a quick profit. When the market began to decline, these investors began selling their assets, causing the prices to drop even further.

It is unclear when or if the market will ever recover. However, there are some experts who believe that the market has already bottomed out and will begin to slowly rebound in 2019. Only time will tell if this is true.

Bitcoin’s market dominance

Since early March, Bitcoin’s market dominance has been on the decline while altcoins have been on the rise. From a market dominance of 54%, Bitcoin’s share of the total cryptocurrency market has declined to 50.4% at the time of writing. This is the first time since December 2016 that Bitcoin’s market dominance has fallen below 51%.

There are a number of factors that could be driving this trend. For one, the overall cryptocurrency market has been on the rise in recent months. This is likely due to increased institutional interest and mainstream adoption. As more investors enter the market, they are diversifying their portfolios by investing in a variety of different cryptocurrencies.

Another factor could be the recent surge in Ethereum’s price. Ethereum has been one of the best-performing cryptocurrencies in recent months, and its recent rally may have drawn some investment away from Bitcoin.

Finally, it is worth noting that Bitcoin’s own price has been relatively static in recent months. While other cryptocurrencies have seen significant price increases, Bitcoin has largely tread water. This may have caused some investors to shift their focus to other assets in search of better returns.

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