Reason Behind the Crash of the Crypto Market: Why Did Cryptocurrency Market Take a Dip?

Last year was one of the worst periods in the history of cryptocurrencies. Bitcoin fell around 80%, and it destroyed the portfolio of the huge amount of traders. It can be really difficult to understand the reason behind this crash. Though you might not be able to recover all the loss, you can at least do a post mortem to understand the mistakes you made.

Understanding the Dynamics of the Trade

In the year 2015, a huge amount of people all over the world started taking a keen interest in Crypto market. Bitcoin was bullish in 2015, and it ended the year 40 percent more than what it was in 2014. The market continued to be volatile, and investors were still confused about whether to invest or not. That was the time when a huge amount of experts started educating people about the best ways to invest in the crypto market. The market was looking bright, and people saw a bright future for the cryptocurrencies.

Importance of Technicals

Bitcoin was on a bullish run since 21-weeks and this continued till October 2015. The rally had been so good that there was no downfall till December 2017. This attracted more and more investors towards the crypto market. Even price corrections were so small that people were never scared of a big downfall. News agencies and experts were positive about Bitcoin’s future, and no one expected a crash in the crypto market.

Sudden Crash & its Reason

The biggest reason behind the fall last year was “profit taking.” Investors never really cared about any downfall in Bitcoin trade. They were scared of missing out on a positive rally and continued to pump more money. New traders continued to invest money while the “pro-traders” were selling their share of coins. The sell-off turned out to be quite dangerous, and the market witnessed a big downfall.

Disclaimer: The information on this site is provided for discussion purposes only, and should not be misconstrued as investment advice. Under no circumstances does this information represent a recommendation to buy or sell securities.