Why Did Everything Crash? Is it the end of Crypto?!
If you were like me, you woke up to something ugly today. You had a great night sleep and checked your phone only to find out that the entire Cryptocurrency market had “crashed”. I know, it sucked. I feel like I have to write this article to explain exactly what is happening and hopefully, it will help ease your worrying.
China has a committee that focuses on looking at risk in the internet finance sector (basically, they look at the risk of Bitcoin). To put it simply, last night they made an announcement that they are banning ICO’s. They believe that the initial coin offering madness is too risky for citizens and that it needed to be stopped (they probably were also mad that they could not make any money off of it). When this announcement occurred, it affected almost every coin but it absolutely crushed NEO. Why? Well NEO has always been known as the ETH of China. The issue now is that it will be difficult for NEO to grow as a coin if it can no longer have ICO’s underneath it.
So before you start selling everything and putting your money under your mattress, I wanted to talk about what I am doing. Yesterday I released a video about NEO and I basically said that if NEO dropped below $27 then it would crash. Well, that happened. The coin’s price crashed to about $20 and is now in the process of bouncing back. I want you to understand that this crash is 100% hype. It was completely news driven and for that reason, I think that everything will recover to their natural levels. People got scared because China is limiting ICO’s but this is not the end of Crypto. Remember guys, most ICO’s are illegal to buy in the USA too. Regulations are just a limiting factor that will shape crypto, not kill it.
I want to show you something very important in the technical analysis of Bitcoin:
So I simply drew 1 line on this chart and I think that it says it all at this point. That one line is the lower support of Bitcoin currently. You are going to notice that the second red pip that drops below that support is followed by a positive green pip. That is important. It means that something called a “fakeout” is most likely occurring.
So should you be worried? A little bit, but I would not sell everything that you own (honestly I would buy some coins at this major discount). As I have stated in the past, sometimes crypto is going to crash. It is a volatile market that is HEAVILY driven by the news (this is a major reason that I keep my money out of the market 99% of the time). Let’s just make sure that we put everything into perspective, Bitcoin is only at 4350 right now. The drop was not that big. On the other hand, if you own NEO you are probably thinking that you thought that drop was impossible. Well, remember that NEO was worth $1 about 2 months ago. If coins can go up fast, they can go down fast. Be careful with your money guys.