Most news outlets rely on self-proclaimed experts to report on the condition and prediction of the market. These experts turn to market analysis, metrics, and historical data to form an opinion. However, an informed individual can draw his/her own conclusion by focusing on the right information. For example, while most articles cite stronger regulation and exchanges heists as the reason the market is down, in reality, more subtle but compelling reasons exist.
#5. Concerted Attacks
Bitcoin has gone through at least seven price cycles during its existence. However, no bear market has been as sustained as the one being currently experienced. The main difference is that in the past, Bitcoin was never been fully appreciated as a serious evolution of money. For the past years Bitcoin was seen more of an oddity, a distraction, and an inconvenience, than a threat. The late bull run of 2017 changed all that; since then, banks publicly expressed (in quick succession) that Bitcoin was in fact a threat to the global financial system. This prompted a sustained campaign against Bitcoin using all possible means to discredit, deter it, and control it.
At first companies announced that they would be accepting cryptocurrencies for their services. Western Union, Uber, Starbucks, even airlines were testing and looking implementing Ripple, Litecoin, and Bitcoin. However, as the banks turn their back on crypto, starting with the denial of use of credit cards, other companies followed.
#4. Decline in interest
There is a general agreement that a loss in public interest is a principal reason for the market drop. Public interest is falling fast and new interest is just not being generated. The media has been quick to capitalize on the story that Bitcoin related Google searches diminish everyday and that more investors withdraw their money than new ones invest.
#3. Failure to Deliver
No Daaps. The lack of mainstream applications is a major lacking in crypto. Save for Steemit, the absence of a Facebook or Snapchat creates a palpable need and evident purpose behind the industry. In addition, this month is seeing the launch of no less than 4 major main nets (EOS, VeChain, Tron, and Ontology). However, even these high profile projects launch have failed to deliver the anticipated boost the market needs. EOS in particular, was supposed to inspire confidence of a scalable future. Instead its launch is embroiled in controversy over its consensus mechanism.
#2. Bitcoin Futures
These play no small role in causing Bitcoin’s demise. Since their launch on December 1, 2017, they have split the bitcoin investment capital. As investors can short Bitcoin and get their contracts settled in cash, it is a far more secure investment than betting on bitcoin itself. Futures contract have been so successful, there are now strong indications that Ethereum and Litecoin futures are on the horizon. This will create a permanent dragon any bullish break out.
#1. Low Trading Volume
The number one reason the market is down is because of a low trading volume. All the above mentioned factors combine to hinder and/or slow down the trading growth of the Bitcoin market. And while this may seem obvious, it’s not. There’s more than meets the eye. On April 12, 2018, the market had a surge of trading (+15%) which caused the largest exchange of Bitcoin in history (so far). $1.2 billion worth of Bitcoin changed hands in one hour. However, this correlated with a rise in Bitcoin short positions (40,000). Also the highest in history. And what makes this most relevant is the fact that both figures were due to high trading activity that originated from Bitfinex. The exchange most associated with being accused of price manipulation.
This Is an important factor in whether Bitcoin prices are a product of investor’s choices or manipulated by special interest groups. Nevertheless, the fact remains that weak trading is the number one reason for the best market.
As of today the market has picked up, but it is an unconvincing move that most certainly be short lived. Additional factors like taxes or the lack of fiat gateway on exchanges affect trading volume. So the true indicators of a bullish market won’t be media articles but a strong reversal of the reasons mentioned above.