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The Big Bitcoin Price Crash of 2018 – Should Investors Be Worried?

by | Mar 21, 2018 | Finance

According to the Wall Street Journal, cryptocurrency prices will soon crash faster than early 2000’s dot-com stock prices. There is just one problem. Namely, mainstream media pundits have been warning of a Bitcoin price bubble from as early as 2010. This being the case, Bitcoin enthusiasts believe that all such predictions are nothing more than attempts to purposefully spread fear, uncertainty, and doubt (FUD).

Here is what we know for sure:

  • UK press makes the claim that the Bitcoin price will soon crash faster than early 2000’s dot-com stock prices
  • Twitter muses banning cryptocurrency advertising
  • Leading coins like Bitcoin and Ethereum continue to decline, but will the market soon recover?

Needless to say, whether mainstream cryptocurrency news reporting is biased or not, it is clear that the Bitcoin price has fallen sharply over the past three months. The good news for investors, however, is that the Bitcoin price might just be about to rebound spectacularly.

Understanding Long-Term Bitcoin Price Predictions

In February 2018, financial market researchers and advisors Fundstrat predicted that although cryptocurrency prices were falling, July 2018 could see prices recover to all-time highs reached in late December. This prediction was (and still is) based on the proposition that the Bitcoin price itself is still following a long-term parabolic growth pattern.

Of course, the term ‘growth pattern’ suggests that the Bitcoin price should be rising. Fundstrat’s Thomas Lee, however, has pointed out that the current Bitcoin pull-back is consistent with 73% of similar Bitcoin bottoms. Specifically, bottoms which see prices fall sharply, before recovering even more bullishly.

Why the Current Bitcoin Price Might Soon Rebound

The most interesting take away from Fundstrat’s February research? If Thomas Lee’s predictions prove correct, the current Bitcoin price pull-back should last for 85-days. This means that in theory, Bitcoin and other cryptocurrency prices should start to recover as soon as March 25th.

What Has Caused the Current Cryptocurrency Market Decline in the First Place?

For the sake of full transparency, it is important to note that research findings presented by Fundstrat are purely theoretical. Bitcoin has, however, consistently peaked and pulled-back throughout the digital currency’s nine-year history. What is more, it is likely that if this trend is to continue, prices will crash harder for longer as cryptocurrency prices rise in the long-term.

To simplify, if Bitcoin can shed 70% of its value after reaching $20,000, it should be expected that Bitcoin could easily correct back to $25,000 after reaching theoretical highs of $50,000 or $100,000. That said, it is important to remember that several unexpected factors have caused a perfect storm for the cryptocurrency markets in recent months.

  • New tax regulations are resulting in more cautious, lower volume cryptocurrency trading
  • Bans on purchasing cryptocurrency with credit cards have shut many new to market investors out of the cryptocurrency market
  • Mass selling of Mt Gox recovered Bitcoin has helped bring down cryptocurrency prices
  • Revelations that fewer than 20% of ICOs offer real investment returns when ICO sales are over have made investors much more cautious when buying altcoins

What Cryptocurrency Tokens Should People be Buying While Prices are Low?

No one can say with certainty if or when the cryptocurrency market will recover. The current Bitcoin price, however, is still up by almost 1000% on equivocal 2017 prices. In like regard, coins like Ethereum are still up by 7000% on prices set just 12-months ago. This being the case, investors would be wise to buy digital assets now which could stand to make similar gains later in 2018.

Digital Currency with Strong Technical Potential in 2018

Cardano – Despite having fallen sharply in value over the past 3-months, Cardano is one coin which many blockchain technology enthusiasts believe will eventually skyrocket in popularity. This is due to the fact that Cardano is being developed by Ethereum co-founder Charles Hoskinson, and offers a variety of improvements over Ethereum itself.

DigiBtye – DigiByte is something of an outsider on the cryptocurrency market. From a technical perspective, however, DigiByte can easily rival much more established digital currencies like Litecoin. This is due to DigiByte benefiting from the largest and most well-developed multi-purpose blockchain on the market, coupled with over 5-years of continuous development.

Dash Coin – Designed to scale automatically while providing instant and almost completely free transaction processing, Dash Coin is one of the fastest cryptocurrencies on the market and unlike other forms of cryptocurrency, is completely self-funding.

Litecoin – Arguably the most undervalued altcoin on the cryptocurrency market, Litecoin’s strength lies with the fact that its soon to be launched ‘Lightning Network’ will allow Bitcoin users to transact Bitcoin instantly and almost freely via a Litecoin side chain. Many subsequently believe that Litecoin will eventually be priced at approximately a fifth of the price of Bitcoin, as the two cryptocurrencies start to be transacted interchangeably.