The cryptocurrency markets have fallen to two-month lows, with a possible rebound on the way.
Over the past month, the cryptocurrency markets have pulled back considerably, falling from a high of $830 billion to a recent low of $348 billion. This low is a return to levels seen in the first week of December, constituting a two-month retracement. This sharp correction has not been kind to new traders:
While the correction has caused a certain degree of panic among new traders, it has caused damage to some more risky investors, as indicated by suicide hotline posts dotting the various cryptocurrency subreddits.
A classic and predictable retracement?
While speculations about price movements can be chaotic in the cryptospace, some market analysts claim that crashes can be predicted with certain reliability. Dash community member Toknormal, in a post on BitcoinTalk, outlined previous 8-month rise and correction cycles in the past, and used them to predict a low in Bitcoin’s price of about $7,500 as the bottom before the market would recover:
“What this means according to precedent is that we NEED to retest at least that 7500 (+or- 20%) region before progressing. It’s just the bitcoin way. This is an uncapitalised asset class that’s rapidly capitalising and there’s so much clamour to get in that it can’t do it smoothly.
The low of $8455 we saw on Bitstamp a couple of hours ago may or may not be the bottom of the wick. To complete the full depth of the needed correction we may have to revisit the $7500 level or even 6k at a pinch to really bake in the last runup but that could just as easily manifest as a momentary panic “fat finger” dump before retracing back up the decline to around the $13k level which is 50% of the consolidation we’ve had since the peak.”
Toknormal drew parallels to the 2013 surge and following bear market, with observations about the historical need for the market to retest jumping off points before taking off again:
“In fact the 2013 rally and that nightmare 18 month recovery followed exactly the same pattern. The reason it took so long to recover is because it went straight from $126 all the way to the top in 7 straight weeks without any of these bubble-bursting corrections on the way (or even mini corrections). That meant that the last support level was the so called “Cyprus spike” way back in April 2013 when it spiked at $266. And sure enough – according to form – it went all the way back to retest that level and a bit more for good measure.”
Dash’s solid position for further growth
While the sharp dip may have taken some wind out of Dash’s sails, current price levels still exceed prices when the Palm Beach Group report recommendation initially set off a spike to $500 and beyond. At present, Dash’s monthly treasury budget is still valued at past $3.5 million, leaving plenty of room for funding projects leading to strong growth in 2018.