Altcoin Market Downtrend: Comparing 2018 With 2014
As the last quarter of 2018 draws near, the altcoin market continues its drop – almost ~85% – against late last year’s all-time-high sparks fears it will go lower or to zero. The concern becomes topical due to new technical analyses which compare today’s situation with a similar scenario in 2014 (it eventually bounced back after about 266 days).
Correction marketcap 2014 VS 2018.
Good morning all, some facts about the current correction and the correction of 2014. pic.twitter.com/Crgbt4j86M
— TJ_crypto_NL [FCK ETF] (@TJ_AFCA) September 10, 2018
While it is ideal to contemplate that it could be at a crucial stage to determine which direction to go in coming days, the market does not necessarily need to follow a particular historical pattern. Rather, it would be expedient to look beyond the similarities in the two periods and focus on what has changed in the market since 2014 and may affect what to expect in coming days.
Biggest decline in altcoin marketcap was in 2014 -86% with a total duration of 266 days before a massive bounce.
— Galaxy (@galaxybtc) September 11, 2018
The scammy nature of several crypto-related projects which were not available in 2014 has put so many investors off. Many investors who have lost their money especially to startups launched out through blockchain-backed crowdfunding mechanism ICOs (initial coin offerings) – wants many to see some altcoins die.
Almost 2000 altcoins today, more volume
Today, there are more than 1940 altcoins in the market compared to what was obtainable in 2014. Though still minute, these altcoins’ dominance level (about 22%) is still higher than what was the case four years ago. There is also a huge difference in the volume recorded in both instances. The prices of altcoins were extremely low in 2014 and many of them had no external market backing unlike today. Also, with so much going on in the crypto scene especially in the regulatory aspect, the market has evolved into a bigger structure with lots of exposure to several complexities.
Bitcoin effect and bottoms
Altcoins tend to drop and rise in value faster than a major currency like Bitcoin. Their volatility is somewhat hinged on Bitcoin’s movement which, when it swings up or down, affects altcoins either way. This has brought several altcoins to their lowest hence uncertain whether there would be more drops.
There’s been a geographical spread of altcoins in recent years which indicates varying use cases of projects developed to meet immediate needs of given environments. From Asia to Eastern Europe and some parts of Africa, blockchain projects using altcoins to power their use cases have increased in recent years. There has also been a move away from the Ethereum network to other platforms for the launch of new projects.