There seems to be no end to the slump in the crypto currency market for January with the major coins registering minor declines whilst some also have lost considerably over the past few days. Once again, the chief disappointment has been Ripple which saw its stock sink to a new weekly low of $1.22 – this means that it is over 60% down on its all-time high of $3.50 now well over a month ago. The same could be said for Litecoin which descended to the $1.60 level, again well below 50% from its all-time high of $350 registered in the first days of December.
Although there were modest signs of recovery, Bitcoin was also considerably down over the past few days and seems to be stuck at the $11,000-11,500 levels having moved in that territory consistently over the past few days with no seeming breakout in sight. This seems to be blamed on the expiry of contract futures on January 27 but it is still a very disappointing performance considering that this coin had reached levels of $20,000 just a month ago. Those dizzying heights seem to be very far away now.
The only coin that seems to be registering a slightly positive performance is Ethereum which posted a small increase yesterday and keeping above the psychological $1,000 mark although the increases have been very sluggish. Ethereum Classic is also hovering around the $28 mark with no real movement in the past days and the price also seems stuck completely in that price range with the highs of $40 very far away. Bitcoin Cash has also been a huge disappointment in the past days sinking to around $1500-1600 and there seems to be no end in sight to its drop in value. Dash is also very far from its highs of $1,000 registered in the December boom period – it now trades at around $700-750.
The decline in the daily transaction volume of bitcoin has led to a significant reduction in fees. Widely utilized bitcoin wallets such as Blockchain have been recommending a fee of about 50 satoshis per byte, or $0.5, for median-size transactions. Lower fees increase the accessibility of bitcoin for newcomers and casual users, especially to users that utilize bitcoin for small payments.
Evidently, the recent decline in the transaction fee of bitcoin was triggered by the drop in the daily trading volume, not due to a specific scaling solution, given that major bitcoin companies are yet to adopt Segregated Witness (SegWit) and implement transaction batching technologies.
As such, when the price of bitcoin increases again and its daily trading volume rises, fees will inevitably go up again. The high fees of bitcoin prevent newcomers and casual users from seamlessly transacting and settling payments.
High fees will likely have an impact on the price of bitcoin in the short-term, if the market recovers again. Innovative scaling solutions and swift implementation of SegWit by bitcoin firms are urgently needed to ensure bitcoin can recover to its previous highs.
Interestingly, Cardano is a currency that seems to be constantly increasing in price and demand with appetite for it always on the rise. The demand for Cardano, better known as ADA in Japan and South Korea, is rising at a rapid rate in the Asian market. Many investors perceive Cardano as a competitor to Ethereum, as it also operates as a smart contracts protocol. The fundamental difference between Ethereum and Cardano is the utilization of proof-of-stake consensus algorithm by Cardano.
Because Cardano is traded frequently on South Korea’s UpBit and Japanese cryptocurrency exchanges, recovery by the two markets will likely lead to an increase in the value of Cardano. The South Korean market is still awaiting the January 30 new account registration resumption by South Korean cryptocurrency exchanges. As new users enter the market, the price of cryptocurrencies like Cardano, Qtum, and EOS with strong followers in Asia are expected to increase in value.
Major crypto currencies will likely recover ahead of other alternative cryptocurrencies in the market in the short-term. Financial commentators have said that investment from institutional and retail traders are increasing at a rapid rate and it is unlikely that large-scale investors will target altcoins with small market valuations and less liquidity.