Just when you thought it might be over for Cryptocurrencies with inflated valuations coming back to earth with a bump - then values start to rise again… at least for a while.
Bitcoin hit a low of less than $10,000 late last night. However, then it saw strong gains in early morning trading bouncing back 20%.
Bitcoin was only leading the way as the buying applied to all the major alt-coins, following the sector-wide selloff over the last couple of days which caused heavy falls across the board.
The selloff was put down to several factors including regulatory tightening in Asia, resulting in lower trading levels or just a long-overdue market correction.
You could say that the latest ‘bounce’ means the panic has subsided but experience tells us that for the crypto rollercoaster panic is never far away.
After bouncing back strongly, Bitcoin prices have since started to slide – after sitting comfortably at $11,000 at one point, the crypto saw a 2% correction to $10,760 – (as at 7.30am GMT). The same could be said of Ethereum, which after initially picking up saw its valuation fall around 2.5% to 952.40.
However, not all cryptos saw a rise followed by a fall. Ripple saw a 16% rise and continued its upward trajectory in morning trading. Cardona also saw a rise of around 4% having seen its value fall 9.61% over the last seven days.
While some may think the crypto boom may be running out of steam, plenty do not. Coinbase, the white-hot cryptocurrency exchange, is bringing on more engineering talent to help it continue to capitalize on the crypto boom.
The company has announced that it’s bringing on the engineering team from Memo.Al, a two-year-old start-up that built a Slackbot for helping technical teams manage notes and instructions.
Crypto investing may be the ultimate white-knuckle ride for investors, but it seems there is no shortage of traders with the adrenalin to carry on.
Hussein Sayed, Chief Market Strategist at FXTM, warns that crypto trading in the current climate is a very treacherous business.
“Finding a fair value in cryptocurrencies is an impossible mission, as animal spirits will remain the key driver. Most people who were buying bitcoin and other cryptocurrencies most recently, are not using them for transactions, but holding them in the expectation of profiting from the endless rising price.
“Whether the animal spirits have already released their grip, remains to be seen and this cannot be ascertained from a two-day slump. “
He adds: “Brick and mortar stores have been very slow to accept cryptocurrencies as a method of payment. This is what worries me most. If we don’t see growth in their acceptance as payment method, then it is not serving its true purpose.