It looks like the bearish momentum has yet again gripped the cryptocurrency market with a heavy sell-off seen currently. Last week, the cryptocurrency market was on an upward trajectory as the market valuations soared by over $200 billion in just seven days. The markets started the new year 2018 at around $600 billion and with altcoins like Ethereum, Ripple, Torn and others gaining significantly, the overall market valuation jumped over $800 billion last Saturday on Jan 6th, 2018.
Ripple had a crazy start to the year, with its price surging by more than 70% in just four days to hit an all-time high of $3.81 with its valuation soaring to above $148 billion. During that Ripple was the second most valued cryptocurrency after Bitcoin in terms of market cap. One of the supposed reasons for Ripple rally was the possibility of Coinbase adding support for the cryptocurrency on its website.
However, later that week, the U.S. exchange refused about any such plans following which, the altcoin has been seen correcting majorly. In the past 24 hours, the altcoin has plunged by more than 21% and is currently trading at $2.54, according to CoinMarketCap. This is nearly 33% erosion in its price from its all-time high with its market cap dropping below $100 billion as well as losing its Number. 2 spot, back to Ethereum.
Ethereum too had a wonderful first week of the year as its valuations surged by more than 33% in last week. The cryptocurrency attained two important milestones last week – one is that it crossed the $1000 mark for the first time and the other is that its valuation too crossed $100 billion-mark, simultaneously. While that the market is seen correcting heavily, Ethereum still remains rock solid with its current price being $1157.35, according to CoinMarketCap.
Also, after a long consolidation for nearly three weeks, Bitcoin was seen showing some momentum this Friday on Jan 5. The cryptocurrency gained by over 10% to cross $17,500 mark which is its this year high, however, it has again corrected back and is currently trading at $15605.00, according to CoinMarketCap.
One thing is clear that investors have started looking out at other cryptocurrencies and altcoins and Bitcoin is now no more the major driving factor to decided the overall market momentum. Bitcoin’s dominance over the crypto markets has reduced considerably in the past six months and is overall market cap contribution is below 35% as on date.
Many analysts believe that the recent run-up in the price of altcoins is because of the significant reduction in transaction speeds while the transaction costs going high as the network is facing a logjam due to huge investor participation. Hence, solving the scalability issues for the Bitcoin blockchain is currently the task of utmost priority for developers.
Also, other investors say that more number of investors are choosing altcoins over Bitcoin is because of the fear of being left out. Also, the perceived value of altcoins being relatively cheap than Bitcoin, they can have more number of altcoins in their kitty against buying one Bitcoin.
With such a bull run in the crypto markets, it remains to seen as how things move ahead as there have been repeated warnings from several professional individuals and other financial institutions regarding a possible “bubble” in the market.