Although the year 2017 has been pretty positive for the Bitcoin price, all positive momentum will come to an end eventually. The Bitcoin price is suddenly dropping pretty hard, as it’s evident people are cashing out with the Christmas holidays almost upon us. No one knows for sure how bad things will get, but for now, it’s time to diversify into altcoins.
It is always important to put things in their proper perspective. Any significant Bitcoin price movement will eventually trigger a cascade of movements across all cryptocurrency markets in quick succession. We’ve seen the Bitcoin price drop by around 3% in the past hour, and every other market has already taken a big hit. It is unclear why that is happening, though, considering that a drop in the Bitcoin price is typically a signal to buy altcoins. Then again, cryptocurrency has never been a rational market.
Even though the Bitcoin price is still holding its own around the US$18,000 level, it is not surprising that a drop in price has occurred. After all, Christmas is less than a week away and people want some spare cash to buy last-minute presents. It is very likely we will see some small price movements in the coming days, although no major long-term shakeups are expected in the process. At the same time, this may also be the beginning of a decent Bitcoin price correction, which has been long overdue.
A 3% drop for Bitcoin is a US$600 decrease at this point in time. It’s not the biggest change we have seen in the Bitcoin world throughout the years. Those who have been around for some time will remember the 90% retracement after the Mt. Gox debacle a few years ago. This small drop means absolutely nothing, and it is quite disconcerting to see the altcoin markets respond in such a negative manner. Again, the lack of rationality in cryptocurrency combined with a growing number of panicky people will increase this market’s volatility over time.
Bitcoin still boasts a solid trading volume of nearly US$16 billion in the past 24 hours. Rest assured this number will rise a bit as a few people will panic sell before things level out again. The Bitcoin price will either continue to bleed very slowly or enter sideways trading motion for the rest of the year. There is zero reason to expect a Bitcoin price of US$20,000 before the year is over, even though 2017 has thrown us a few curveballs already.
Bitfinex is still the largest exchange in terms of Bitcoin’s 24-hour trading volume, although its lead over Bithumb has shrunk ever so slightly. GDAX is still in third place, and we’ve now seen BTCC take up fourth place. BTCC successfully overtook both bitFlyer and HitBTC in order to do so, which is pretty remarkable. Then again, only US$70 million separates these three exchanges right now, which is virtually nothing in the Bitcoin world.
A dip like this one was to be expected, and there may be a few more temporary pullbacks in the coming days. For now, there is zero reason to sell altcoins in favor of Bitcoin, as a typical trader would do the exact opposite. Altcoins have proven to be far more profitable than Bitcoin in recent weeks, and it seems that situation will not be changing anytime soon. An interesting week is ahead for all cryptocurrency enthusiasts; that much is evident.