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Oct 17 – 18: Crash or Correction For Crypto?

We look at the price decline in cryptocurrency from Oct 17 – 18 to see why major cryptos like BTC, LTC, and ETH dropped.

On Oct 17 – 18 BTC, LTC, and ETH dropped back down from their historic highs to recent lows with ETH dipping below $285 on some exchanges.

A correction had been expected since the Oct 12 – 13 price spike. The spike saw the major coins climb toward all time highs. Crypto generally sees a correction after an event like that. Thus, that circumstance gives weight to the natural correction theory.

Also, there was no public major news that would have caused the decline, so that gives weight to a natural correction theory.

In other words, aside from the price moving up quickly recently, there was nothing specific that happened publically in the crypto space to cause the decline.

In fact, BTC has an upcoming fork with Bitcoin Gold that (if all goes as planned) will create “free coins,” Ether just had a successful fork that improved the platform, and so it goes with other coins (there is generally good news). So, if anything, it would be rational to expect some bullishness moving forward and to expect that this will be a quick dip.

With the above said, if one were to speculate on the speculation, they might speculate that this is simply big bulls taking their profits after some weeks of gains, in a very organized way… that would have the SEC calling if this were the stock market.

Thing is, crypto isn’t a regulated space (aside a few loose rules for exchanges), there is no Dodd Frank (which protects against things like spoofing), and if I had to formulate a theory I would say “someone(s) with a few hundred millions in coins are purposefully dragging down the major exchanges of the world to manipulate the price (specifically by spoofing), to cause a sell-off, so they can either A) get out, or B) buy more coins.

I speculate this, because it is the only thing that explains that constant whole number orders on the exchanges that look like spoofing and seem to be driving the price down. That is a theory, so take it with a grain of salt.

My justifications aside, I’m going to put my money on B + a natural correction.

In words, one could speculate that whomever it is that is manipulating crypto, along with those caught up in the natural sell off, will all come to the same conclusion they came to last time… that is, “dang, these coins are now a great value, I want more.”

In all cases, the current price drop likely doesn’t single the end of crypto. Still, it is unclear if the current drop is just a standard correction (happens all the time in crypto) or a crash that will stick for a while like the early Sept crash (or the dreaded late 2013 crash which was followed by years of stagnation).

UPDATE: In the short term, that is as of October 19th, it looks as though it was a correction (in Bitcoin’s price). It amounted to little more than a hiccup for Bitcoin, but other coins remain down.

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What do you think?

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