As slow recovery appears
This crash may be considered a major drawback.
The dust settles
The utility of a Crypto is determined by its use on a commodity market. Currently though it is mostly being used as a tool for investment and speculation. This creates a very wonky base for its day-to-day use adoption. While a lot of people wanted to get in on it last year, causing a queue at many Crypto services, right now that will be the opposite. It really looks like many have taken a run to the exit, meaning cashing out on money. A panic run for USD, EURO and other types of bankers money seems to be the major cause of the drop of 46% within 10 days. That is way more than just the effects of caused by automated leverage trading. This could mean overall that about 15% of capital moved out off Cryptos back into bankers money. Also I believe automated leverage trading is part of what caused this massive drop.
The reason that I see it as more than what is being called a healthy correction is because that is mostly limited to a drop between 20 and 30%. Sometimes after that another few dips, followed by little peaks and after that the market picks up again where it left off. But this to me is a real market crash, because now capital is actually flowing out off Cryptos. It is not the complete 46% drop, from 832 billion on januari the 7th downto 450 on the 17th, that I think will flow back into the banking monetary governance system. My expections are that about 15% of capital will flow out. Meaning that the market total market Cryptos capitalisation in US Dollar could get back to about 707 billion. When I see that Tether is dropping and the overall market activity is gaining that could mean the start of a recovery. Yet, as far as I see it calling this a healthy correction is acting unrealisticly, to me it is a real market crash.
Where will it go from here?
It looks like the deepest valley was on tuesday the 16th around 22.30 UTC/GMT. After that trading picked up again, still struggling to stay above the 500 billion total market cap. It seems it is going to get stable at about 510 billion USD. At some point moving back up to 707 over time. But this crash will sure have scared a lot of people away from getting into Cryptos. And quite a few will have gotten out by now. This will mean less transaction activity, which might be a good thing for Ethereum and Bitcoin. As these Cryptos still struggle with a few unconfirmed transactions. Now might be the right time for those blockchains to take a breather, as it were. And the lines at the Crypto services are probably going to drop too over the next couple of days, as many will not even want to get in any more.
In my portfolio I saw a value drop of almost 46% and I consider that at least 15% will not be regained on a short-term. Somewhere about 30% recovery I hope to see before the end of januari. Yet nothing in the Cryptos realm commes with a guarantee. For some this recent dramatic dip might be a reason to buy, or even to get into Cryptos right now. But I expect that all-in-all it will be that a part of the capital will flow out for a longer term. Maybe it is a good thing that the hype it was becoming got tempered a bit, to state the least. It is no fun to lose such a big amount of my invested value and I guess you have a kind of the same experience. But I still decided to HODL even though panic really started to close in on me too. Let's leave it that I have known happier days...
Still, as far as I can see, I expect the Crypto market to recover over the next 10 days or so. By the end of januari 2018 it could be around 707 billion USD in total capital value. And I still believe in Dogecoin to make another jump, as this year is the Chinese year of the DOG(E). That might sound a bit weird, but the market does not always work in a logical way. The echo of the last crash might support that idea. As a lot of FUD {Fear, Uncertanty and Doubt} had been spread again, that also caused panic to set in. Strangly enough by websites that claim to be about Cryptos, yet seem to feed on causing panic. It is healthy to look through that anyway. But apparant circumstantial happenings do effect the Crypto market too. Therefore: 狗的新年快樂 | "Gǒu de xīnnián kuàilè!" (EN: "Happy New Year of the DOG(E)!")
Things will get better
True, it has been awefull checking my portfolio lately. And it might even be like that for a while longer. Yet I still am at a gain overall, only that gain dropped close to half. It is the worst Cryptos market crash I experienced so far, but I do see a slight recovery already appearing on the horizon. Maybe the most scared investors left the cryptos market in panic. And the ones that have a hard time adapting to change too. Only time will tell how this will play out over the long term. Could be that I was wrong to HODL all the way and my Chinese year of the DOGE hunch is just wishfull thinking. That is a risk I took with the Cryptos that I plucked from my Fruit Of Work on Steem. Which reminds me, to remind you, to only invest in Cryptos what you are willing and able to lose.
And it aint over 'till it's over...
May the Cryptos be with us!
We are not there yet...
Screenshot taken at CoinMarketCap dot Com.