Hype and Hope Causing Bitcoin Investors Pain as Market Corrects

The parabolic growth that began at the start of 2019 has since corrected back near or below the $10,000 level. The short term hype of the cryptocurrency community can often lure investors in, but the admonition to stay sober is verified.

Back to four figures.

The parabola corrects, but at the time people get caught up in it, and the temporary hype. The inevitable hangover comes after the party. Stay sober people~~ pic.twitter.com/rHLfoE4Mpk

— dave the wave (@davthewave) August 14, 2019

Positive Months Before a Correction

The months leading up to the peaks of late June and early July had the Bitcoin community in a flurry. Large jumps had increased the hope that the bull run would show more stability than the bubble of early 2018. Many factors led to the bull market. Increased international adoption, hash rate jumps, and a positive difficulty adjustment all gave investors hope. What’s more, the market had been clearly oversold at the close of 2018. Investors looked to Bitcoin as a possible hedge, given the instability of the stock market and threats of inflation. But hype and hope are dangerous drugs. As the market screamed forward over 300% through the spring and summer, some took the bait. The mid-summer correction at the end of June brought the correction of the parabolic rise. Prices peaked just over $14,000 and then proceeded to drop, now settling just under $10,000. A number of factors have surely played a role. Recent news of another exchange scam and fear of another bubble have certainly affected the overall bullish mood.

Bitcoin Fundamentals Are Vital

However, more than anything else, the market had simply been overbought. The substantial drops from the close of 2018 had been entirely subsumed, and the market had already outstripped the peaks of May 2018. The current correction brings the market back into the scope of the price range seen during the middle of last year. While this is still dramatically higher than the start of 2019, the support levels are lower than the peaks. Cryptocurrency investors have come to expect massive increases in short times. In fact, these corrections are healthy. The market must find stability, and as each successive bull run and correction occur, investors are getting wise. However, for some, buying into Bitcoin at the end of June this year has proven painful. As Twitter user @DavtheWave points out, the hangover always comes. Investors are smart to stay sober, ignore the hype, and watch fundamentals, even if Goldman Sachs tells them otherwise. Think the market will remain at or near $10,000 as it finds stability, or will the correction continue back down near the levels that started the year? Let us know in the comments below!  Buy and trade cryptocurrencies with a 100x multiplier on our partner exchange, StormGain.

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