At the beginning of this year I started a 30 days writing challenge. Basically, I wrote every day about a topic I wasn't very comfortable with, having 2 goals in mind:
- to learn more about that topic
- to maintain (and enhance) my writing discipline
Thing went so great, that I decided to continue writing about this topic every day even well after the challenge ended.
The topic: daily crypto market evolution.
So, during the last 90 days or so, I wrote each and every day about the prices of the top 10 crypto assets and very short analysis on the 30 minutes, 1 hour and 1 day charts of STEEM and SBD.
Probably the biggest benefit of this exercise was the insight that I got into the markets. It's easy to get carried away by FUD, by over-optimistic news, or even by your own biases and expectations. But having a daily, constant and cold exposure to this topic kinda puts the whole thing on a different perspective. You get to see trends or direction with more clarity. You start to understand a bit more than just the dry technical analysis or the irrational jumps generated by news (either positive, or negative).
And my overall conclusion after almost 100 days is that we live in a completely different market than the one at the end of 2017.
Here's how:
1. The Hype Is Over
After Bitcoin being on the front page of almost every newspaper in the world, it seems we reached a certain level of saturation. I mean, it's been on Ellen DeGeneres show, it's been mocked by the Ultra Spiritual dude, it's been downplayed and then revered by Jamie Dimon and so on and so forth.
It was bound that at some point the audience will get fed up with it. So, not only Bitcoin news are less viral than before, but the overall interest of the mainstream crowd vanished a bit. It's not that cool to be on this wagon anymore. Especially with those highs and lows. Too risky.
2. Institutional Money Are Creating Friction
The impact of Bitcoin futures, although highly praised at the time and considered a confirmation, or a graduation of Bitcoin, who's finally allowed to sit at the big guys table, kinda backfired. Not only it didn't bring the expected increase in price, but it literally helped the price go down.
Because, you know, financial instruments, like futures and options, are way more complicated than simple "buy and sell" exchanges. And the more complicated a financial instrument is, the easier you'll get fucked by it. That's exactly what's happening with Bitcoin now: with the arrival of the futures people finally got a way to short Bitcoin and that creates a lot of friction in the market. It doesn't necessarily bring the price down, but it adds a second layer of activity, one that slows down the price a lot, no matter its direction: the pumps, as well as the dumps, are way slower these days.
3. Bitcoin And Blockchain Finally Diverged
In the early days of the hysterical hype of the last year, the main message was that Bitcoin and "Blockchain" is the same thing. It took a few months to the mainstream crowd to learn the Bitcoin is just an application of the blockchain technology, and not even necessarily the best one.
More and more applications of the blockchain appear every day, and that has a strange effect on Bitcoin (and, subsequently, to the most visible alts). Now, that Bitcoin is not the only application of the blockchain, but, since blockchain itself is a very cool thing, the interest in the financial speculation of Bitcoin, as an asset, is depleting.
Investors are looking at the technology more than at the token.
4. ICOs Forced Regulations
The ICO frenzy ended quite bad, if we really look at it. The speed and the magnitude of the phenomenon were simply too big not to be finally toned down by governments all over the world. So, my take is that because ICOs were such a viral phenomenon, we're now seeing regulations in major countries, like China and US.
There are quite a few ICOs still going on and the practice of tokenizing a startup and getting investment by selling those tokens at the beginning of the business cycle is certainly not dead, but I'm seeing a lot less pizzazz around it. As a result, the whole trading activity across the entire crypto spectrum is less vivid than before.
5. Scams Are Keeping People Away
BitConnect popped, eventually. I mean, it was just a question of time. If you would have just some basic math skills you couldn't accept that return scheme without rising both eyebrows.
But since this time we were seeing something way more "techy" and with a lot more validation than just plain, brain-washing scams like OneCoin, the impact was bigger. A lot of people are now scared of entering in a "crypto based scheme", because they don't have time to learn and they're afraid they'll step right into the next BitConnect.
While the popping of big time scams was a good thing, the ripples are a bit too deep now and we'll need at least 6-9 months of a scam-free crypto scene for the sentiment to bounce back.
There are a few other reasons why I think the markets are bit duller than 3 months ago, but, all in all, I think those 5 above are the most important.
We're entering a "sleeping" stage, in which jumps may not be as high as before, volumes significantly lower and the sentiment predominantly bearish. I don't think we're in a bearish market, there's still a lot of unfinished business between $11k and $17k (if we talk only abut Bitcoin) so there's still room for a new bull trend.
But I don't expect it to be as fast or as consistent as the last one in November-December last year.
As always, time will tell.
I'm a serial entrepreneur, blogger and ultrarunner. You can find me mainly on my blog at Dragos Roua where I write about productivity, business, relationships and running. Here on Steemit you may stay updated by following me @dragosroua.
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