Cryptocurrency Price Analysis: An Unlikely Turn of Events in 2018
The start of 2018 was exceptionally volatile for a majority of the top cryptocurrencies.
While most of the top coins started the year on a high note following an exceptional performance in December, the trends proved to be unsustainable for some of them. This came as a surprise to many investors who had expected the exciting trend to spill over into 2018.
Take a look at how some popular cryptocurrencies performed and likely reasons behind the trends.
Bitcoin had it particularly rough especially after the December 2017 rallies that saw it pull the entire crypto market to unprecedented new highs. It has been on a decline since the start of the month. Historically though, the coin has always had a weak January.
After starting the year at around $14,000, it crashed to almost half of its December all-time high to dip below the $10,000 mark midway through the month. But soon after this BTC price started on the path to recovery briefly hitting $12,045 on January 18.
However, it has once again experienced a correction on the final few days of the month even hitting a low of $9,627 at some point according to data from Coindesk. It is backed up above the $10,000 mark as at press time trading at $10,023.5, which is a dip of approximately 5% over the last 24 hours.
Ethereum is one of the few crypto coins that have not had it too rough this January. It started the year at around $747 with a market cap of $72.2 billion according to Coinmarketcap data. The token kept on rising to hit a new all-time high of $1,417 on January 10 according to Coindesk. This was a rise of more than 60% within a single week.
However, over the same period when Bitcoin sank below $10,000 halfway through the month, Ethereum too went down by about 31% to $871. But it managed to recover from this drop and has maintained a range between $1,000 and $1,200 since then according to Coinmarketcap. As at press time, it was trading at around $1,114 on the exchange, a decrement of around 3% over the last 24 hours.
Ripple started the year on a positive note starting put slightly above the $2 mark and gradually ascending to more than $3.8 by 4th of January according to Coinmarketcap. The coin which had briefly surpassed Ethereum to become the second biggest crypto by market capitalization seemed set for a brilliant year.
Unfortunately, this rally was not sustained as it began a steady downward trend culminating around January 17 at the price of $0.9. It however steadied again and got back above the $1 mark and has been trading around this point since.
Current Ripple price on Coinmarketcap is $1.13 as at press time marking a decrease of more than 7% over the last 24-hour period.
Litecoin started the year at around $231 and recorded a significant rise over the first one-week period. After ascending above $300 on January 6 however, the coin started descending to hit its lowest point on January 18 at about $178. It briefly recovered to highs of around $214 on January 20 but could not sustain the surge.
As at press time, it is trading around $160 according to Coinmarketcap. It is worth noting that this price marks a decline of about 6% over the past 24 hours.
Factors behind the Trend
It is apparent from the above data that even though the cryptocurrency market ended 2017 in style, 2018 has started out on a rather low note. A pattern emerges from a study of the price trends on the different tokens considered. Overall crypto prices hit their lowest point around mid-month.
This drop was linked to regulatory fears in the South Korean market that plays a significant role in the crypto industry. It is currently ranked as the third most crucial crypto market and any changes there affect overall industry performance. The highly speculative crypto community reacted by a massive sell-off of crypto coins driving prices down.
However, when it came to light that the Korean government would not be imposing a ban on all cryptocurrency but simply tightening regulations, there was a slight market recovery showing a restoration of the community’s confidence.
But when its rule on banning all anonymous crypto trading took effect on January 30, most coins again suffered a correction as a result. Since the rule came into effect, only traders whose identities on exchange platforms are linked to real bank account identities are allowed to trade.
These trends go to show just how emotional the cryptocurrency market still is and the need to exercise logic when investing in the space.