Market Analysis

Reasons behind the ongoing cryptocurrency market dip

Since December last year, bitcoin’s price has been on a constant decline, reducing from $19,000 to $5,980 at its annual low. The same has happened to most digital coins such as litecoin, Ethereum and ripple some of which have lost up to 20% of their market capitalization. One of the reasons behind the ongoing cryptocurrency market dip may be manipulation from large-scale investors.

Some major names such as Ethereum (ETH), and bitcoin cash (BTC) have reported 14% weekly declines in price. Meanwhile, EOS is down 6% and ripple (XRP), has shed 9% in the last two weeks. The only top-25 digital coin that has experienced minor gains this week is TRON (TRX), which was largely supported by positive news flow.

Additionally, the total market capitalization had dropped to $322 billion by 24 May. According to coinmarketcap, this is the lowest level since April 16. Currently, the total market capitalization stands at $337 billion, which shows a 14% decrease in the last 14 days.

Large-scale investors always have an unfair advantage over the retail traders, since they have the money and resources to manipulate the prices. As such, many cryptocurrency traders have been complaining against the manipulation in the markets, which has resulted in huge losses for small investors. If the United States Department of justice will manage to track and nail the culprits, this will have a huge positive impact on the digital coins.

Recently, a group of cryptocurrency researchers claimed that future markets, institutional investors and large-scale traders are behind the ongoing cryptocurrency market dip. They manipulated the market to cash out short contracts by purchasing and selling massive amounts of bitcoin in a correlated way. The CME futures trading began immediately bitcoin reached its all-time high on December 17th, 2017. As such, it is obvious that institutional money was stocking up before this date.

Do you agree that the ongoing bearish market can be blamed on manipulation? And if so, can this be prevented in the long-run?

Share your thoughts in the comment section below

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coinmag

Having contributed to many leading financial blogs, Ken's love for cryptocurrencies and the blockchain technology has him on high alert on all price developments within the cryptocurrency sphere.

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