The Bull is Back

If you have been sticking with crypto the last five months then you know exactly how the market has been. The market had been incredibly bearish. Prices were falling throughout the whole market as weak hands have been withdrawing their money from the bearish market. This continued to the point where Bitcoin fell from an all time high near $20,000 into the $6,000 range. Now that is a significant drop. I'm not sure if that could have been called a healthy correction. Things like this don't necessarily happen in the stock market for example. In the stock market, a 10% drop would be absolutely huge. In the crypto market? It's a regular occurrence, sometimes even happening within a single day. The crypto market is often called the wild west and that's for good reason. It is extremely volatile, regularly swinging by multiple percentage points. It's something that investors, and traders, have grown extremely accustomed too. Investors who hold crypto understand how meaningless the short term swings in price are. Even though it can affect a portfolio by a lot, it's normal in the crypto market. If I saw my stock portfolio drop by 10% I would be worried. If I saw my crypto portfolio drop by 10%? I'd brush it off. Many times has the crypto market dropped by a significant margin just to bounce back strong. This is what many expected when the bear market first started but the market never really bounced back as it had in 2017. So this time has definitely been different. It signaled that the bull market we enjoyed in 2017 may be over. 2018 has been a bearish market for sure.

However, things seem to be reversing. The month of April has been interestingly bullish again. Bitcoin and other alt coins have seen a nice appreciation from where they once were. I'm not saying that the bear market is fully gone. It can come back extremely quickly due to the volatility of the crypto market. Its extremely hard to predict. However, the month of April have shown some bullish signs as the price of Bitcoin reached $9,300. Still very shy of its all time high price. The rest of the market has rebounded along side Bitcoin. The bull market might very well be back. If current trends continue, the prices of many cryptos will continue to go up and appreciate in value. Of course, nothing is for certain and there can be a quick reversal that investors and traders alike should be prepared for.

The current market brings a lot of questions with it. Is the market truly bullish for the long term? I think overall, there is still a very bullish market sentiment around cryptocurrency investors. Many investors took the down market to stock up on their favorite cryptocurrencies in anticipation of a market rebound. I know I did. I also know a few fellow investors who did the same. It was also a great time to diversify or change your portfolio. Prices of alt coins were relatively cheap and it gave an opportunity for investors to restructure and weigh their portfolios how they saw fit.

Regarding the question of whether the market is going to remain bullish, no one really knows. For the rest of the year we may see a bullish market like the one in 2017. This is what I am hoping for and think will happen. Obviously, If I thought prices would continue to fall I would pull out of the market. Instead, I am still invested in anticipation of another great year in the cryptocurrency market. With current trends I think this is possible. I believe the next step in continuing the bull market in the crypto space is for Bitcoin to break past the $10,000 mark. This is important because the whole market follows Bitcoin. If Bitcoin is weak, the market is weak. If Bitcoin is strong, the rest of the market is strong along with it. This is how much of the crypto market has been trending in recent times. Following the price swings of Bitcoin. Bitcoin, as the largest and first cryptocurrency, greatly props up the rest of the market. In fact all alt coins besides Bitcoin Cash, Ethereum, and Litecoin are primarily bought with the use of Bitcoin. Exchanges such as Binance use Bitcoin and Ethereum to be able to buy the other cryptos listed on the exchange. That means if an alt coin is trading at .01 Bitcoin and the price of Bitcoin is at $10,000 it would be worth $100. Now if the price of Bitcoin falls and if the price of the alt coin is still worth .01 Bitcoin, then it has fallen in price relative to the U.S dollar. If Bitcoin were to be worth $5,000 the alt coin would then be worth $50. This is a big reason why the price of Bitcoin affects the prices of hundreds of different alt coins. Furthermore, Bitcoin is more likely to hold its value percentage wise compared to alt coins. So if Bitcoin were to drop by 50% like in the previous example, it is likely that alt coins would drop beyond 50%. As the market largely depends on the strength of Bitcoin, it is important for Bitcoin to reach the $10,000 milestone again.

At the time of this writing, Bitcoin is in the $9,200 range. This is not far from the $10,000 mark that I expect it to break again. With the speed and volatility of the crypto market, this can be done relatively soon. Barring any major drops in crypto prices of course. Another large cryptocurrency, Ethereum, is currently priced at around $700. Down significantly from its highs in the $1,400 range. I expect Ethereum to follow closely with the price of Bitcoin due to reasons stated above. Hopefully, the bearish market will be gone for good and the bull market will be here to stay. Barring any major changes in the market, I think it is primed to take off as it did the year before.