When I woke up this morning (UTC + 3), my overall value in coins on Binance had done a nose dive by a considerable percent (approximately 14%). I had not set up stop loss orders on any of my coins. I thought there had been enough market corrections from Christmas last year to last a lifetime but boy was I wrong. But this has been another lesson for this young and naive trader.
The only survivors of this bloodbath were NEO and Monero. NEO has actually gone up in value. It was around $75 on New Years and is currently trading at $180 at the moment of writing this. This is an increase of 140% in 16 days. Anyone who had been eyeing NEO has made handsome gains in their portfolio. Monero on the other hand, has shown relative stability over the past one week. It was around $372 on the 12th of January and is currently trading at $398, 2 dollars shy of $400.
All the other top coins have shown considerable losses of an overall average of 10%. Bitcoin is down 3.41%; Ethereum is down 7.86%; Ripple has taken a blow of 14.22%; and Cardano has been hit by a 12.27% decline.
A summary of the losses in the market can be found on coinmarketcap.com.
So what possible theories are there to explain today’s correction?
The first suspect on everyone’s minds is South Korea. We all know that the South Korean government has been working tirelessly to tame Cryptocurrency trading in the country. But this theory may be debunked by the recent public announcement by South Korea’s President Moon Jae-in via his spokesperson Jeong Ki-joon.
In the statement, Jeong emphasized that there will be no Cryptocurrency trading ban in the near future. He also added that the South Korean government will only crackdown on anonymous cryptocurrency trading accounts, punish market manipulation, money laundering and fraudulent transactions.
Perhaps his last words of an impending crackdown of anonymous accounts has led many South Korean traders who value their privacy, to cash out systematically since the announcement was made on the 15th of this Month; only yesterday. We all know that the main goal of cryptocurrencies as outlined by the creator of Bitcoin, Satoshi Nakamoto, was anonymity and decentralization. Any control or revelation of personal information is highly frawed upon by Crypto Users and Traders.
But upon re-reading the South Korean President’s statements through his spokesperson, one is left to wonder what control the South Korean government wants to hand down to Crypto Trading in their country.
Will they enforce, Know Your Customer (KYC) policies? Will they demand the names of traders making more than $20,000 per year from the various exchanges like the IRS did to Coinbase?
If this theory holds water, then the South Koreans are simply fearing what the future may hold in terms of providing personal information to the exchanges and paying taxes. The market might stabilize after these two questions are answered by the South Korean Government. This is something I hope will be cleared up in the next few days by the same spokesman or the President of South Korea.
My second and last theory as to why the markets nose dived today might be simple as cutting apple pie. The market had gained too fast for it to handle, that the selling en mass had to happen at some point. We all know that the Cryptocurrency value space is more or less controlled by supply and demand on the various global exchanges.
That means that somewhere this morning, individuals or organizations in the market decided to cash out by selling. This then triggered the proverbial domino effect of triggering stop loss orders (which we should all try and use) set up by the various traders around the globe.
There is also a bright side to this market correction. If you have some capital lying around, it would be a good time to snatch a few TRON (TRX) coins like a Whale. In addition to that, you can grab plenty of Verge Coins (XVG), Ripple (XRP), Cardano (ADA), Stellar Lumens (XLM) and IOTA.
Any seasoned Crypto-currency trader will find today’s market correction or dip as a normal day in the Crypto-Verse, but for a new trader, this would look like Armageddon. If you belong to the latter group, simply hold on to your coins and avoid selling at a loss due to panic. Let me borrow some slang words when I say, ‘Chill out for a few days and watch the market recover.’
Follow us on Telegram.
Follow us on Telegram