The world of Bitcoin and cryptocurrency is always filled with interesting surprises and turnarounds. Earlier this week, most of the cryptocurrencies suffered from a major downturn. Luck has turned in favor of the patient holders, as nearly all currencies in the top 20 have turned green again. Not all of the top currencies and assets recorded equal gains as we will explain below.
The Cryptocurrency Markets Cannot be Kept Down Forever
It is not uncommon for cryptocurrency markets to see highs and lows in the same week. Even though Bitcoin volatility has become less of a factor over the past few years, the Bitcoin price still dictates what happens to the rest of the markets. Last week, the Bitcoin price trend was bearish, and all other major currencies recorded small to significant losses. However, these setbacks are only a momentary snapshot of how cryptocurrency markets behave over time.
When we look at those same charts today, it almost looks as if there were no losses a few days ago. Nineteen out of the top twenty cryptocurrencies are in the green, with the exception of EOS. That is not a big surprise as EOS only recently concluded its ICO and immediately got added to multiple exchanges. The token will see some major volatility until everything calms down in a few weeks from now. Other than EOS, everything is looking rather peachy for the top currencies.
Not all of the top currencies record equal gains. Bitcoin is going up in value, which often allows other currencies to do the exact same. However, Ethereum “only” gained 0.91%, whereas NEM shot up by 19.22%. The biggest gain in the top 20 belongs to BitShares, with a 22.74% value increase. Most currencies are in the single-digit gains before the decimal.
Looking at the bigger picture, there are other currencies going through a value decline right now. Most people will have never heard of SaluS, yet it is worth $26.59 despite a 36.29% loss over the past 24 hours. Even fewer people know about Veritaseum, let alone why it would gain 79.98% in value. This just goes to show there is a lot more to cryptocurrency markets than just supply and demand. Lesser coins and tokens will often go through pump-and-dump cycles. It is possible that is exactly what is happening to some smaller currencies with large gains and losses.
This is also an illustration of why trading based on emotions is a bad idea. Markets can turn sour for days and recover all losses within the next day. They can equally double in market cap and see the gains wiped in a few hours. Events like this make it difficult to trade rationally. However, there is no reason to panic just because the market is having a less-than-stellar day. If the currency or token belongs to a promising project, things usually will recover with time.
Cryptocurrency ICO tokens should never be traded based on emotion either. Despite EOS showing a double-digit price decline right now, a lot of investors will hold onto their balance for quite some time. Most of the projects go up in value as time progresses. Selling tokens right when they hit an exchange is a decent way to make a quick buck. However, if you were to hold on to these tokens for a few months, they might double, triple, or quintuple in value. Cryptocurrency markets are constantly evolving, and price shifts will take place on a nearly daily basis.