The combined market cap of all digital currencies has fallen below $100 billion after reaching an all time high of $116 billion just two weeks ago with sentiment seemingly turning downwards after an incredible bull run.
Ethereum has born the brunt of it, crashing down by $100 from $330 to $230 in just two-three days following a GDAX flash crash that sent eth’s price down to 10 cents temporarily.
But no currency has escaped the sell-off. It’s red everywhere. Name a coin and it’s down with bitcoin one of the biggest loser, down some $500 in days, now trading at around $2,300.
Some say panic may be taking hold, some say it’s just a correction, some say it’s summer bears want to play, some say nothing has changed as fundamentals remain strong, with no one really knowing what exactly will happen next, but sentiment may have changed.
However, whether that is temporary or more medium term no one quite knows. Traders may simply be taking profits, as most probably are ICOs, excreting a downwards pressure, probably helped somewhat by speculators.
How far that downwards pressure will go no one quite knows. Everyone is calling bottoms and tops and double bottoms or triple bottoms, but we can only be sure with hindsight after the event.
The most interesting question, however, is whether the party has stopped, or whether a different sort of party has started. Because long term investors will probably be somewhat relieved there was a break slowing things down a bit.
As, at one point, it felt like eth was shooting straight up to $1,000, which of course would have been very unhealthy. Long term investors, therefore, may think a cooling down was necessary so that we can enjoy the summer sunshine.
As such, they may see an opportunity while others see fear, but of course whether there would be even more of an opportunity later on, or less, no one can quite say since price is unpredictable in the short term.
In the long term, they may be hoping that whatever price level they buy currently is irrelevant if gains of 10x or more are repeated again as they have done previously, especially since there has been no cataclysmic event.
But, we’ll see how all of this develops in the coming days which should give us a better picture of whether this is just fuel for another leg up or whether it’s more of a medium cool down to complement the sunshine.