There seems to be no end in sight to the crash in the crypto currency markets as markets continued to crash further on Thursday and early Friday in some cases by as much as 15%. There seems to be no real explanation to this constant decline in prices but announcements such as those coming from the Indian government that it is clamping down on all crypto currency use cannot have helped the situation at all.
As always the prime loser was Ripple which saw its price decline to below the $0.80 mark at around $0.78 – a resistance level that was seen as rather impossible only a few days ago. Bitcoin also saw a dramatic decline in its price with this reaching the $8300 mark at one point after having peaked at around $9500 during the day, a decline of over 12%. Other crypto currencies such as Dash and Litecoin also experienced heavy losses with the latter dipping below the $120 mark – almost 200% below its all-time high of $350 achieved in early December. The same went for Bitcoin Cash which dropped steeply to around $1200 after a mini rally which had taken the price back to $1500.
After spending most of the day increasing, Ethereum suddenly shot down by around 10% followed by its sister currency Ethereum Classic which also saw considerable drops of around 12%. Although this currency is still experiencing considerable variations – it is still one of the best performers considering the rapid downturn that the market is currently experiencing. Several analysts and experienced investors are even predicting further downturns for the market although some have also said that the resistance level of BTC is currently around $8000.
Most cryptocurencies in the market fell by more than 15 percent, as major cryptocurrencies like Ripple, Cardano, Bitcoin Cash, and Stellar have fallen in the range of 12 percent to 16 percent. Analysts have demonstrated their concerns towards Ripple specifically, as it fell below the $1 mark for the second time in two weeks.
Similar to how the $10,000 mark is a psychological threshold for most bitcoin investors, the $1 mark represents a similar threshold for Ripple or XRP investors. While the price of Ripple has rebounded after dropping below $1, it is important to acknowledge that the price of XRP has fallen below $1 twice within the past 2 weeks. It is now actually below the $0.80 mark and there are predictions that it could even drop to $0.50 before starting a recovery.
Other cryptocurrencies have also struggled to show any signs of short-term recovery. Bitcoin Cash and Cardano have remained stagnant for weeks, maintaining their positions as the fourth and fifth most valuable cryptocurrencies in the market. While the two cryptocurrencies have fallen significantly in the past week, other cryptocurrencies have moved in a similar trend. Stellar Lumens and Tron have effectively been wiped out.
On a monthly basis, the entire cryptocurrency market has declined by $120 billion, from $590 to $470 billion and has fallen even further over the past few hours to around $450 billion. Usually, even after major corrections, the market tend to record gains in the mid-term, often on a monthly basis or a quarterly basis. The past month has been a slump for the cryptocurrency market and based on the daily trading volume, overall interest, and momentum indicators, it seems unlikely that the cryptocurrency market will increase by a large margin in the short-term.
To sum up, while it is a viable time for newcomers to enter the cryptocurrency market, it is not particularly the best period to invest in the market. If the market shows some signs of recovery in the short-term, then it would be an option to invest but at this moment, it is most important to diversify assets and minimize risk.