Photo: images.google.com
There is no single reason why bitcoin is on a downward trend. Several reasons, including many new people buying bitcoin at premium prices with more speculation, have actually taken prices at all times.
Now that all beginners have bought - demand has fallen and according to basic rules for demand / supply - when there is no one to buy at high prices, it should fall. That was what happened when it returned from 19K to 16K and then to 15K and then oscillating between 13-15K; 10-12L; 9-10K and finally hits new lows today at 7K.
As the price drops, there is no shortage for bitcoin bashers to pass different comments and media misinterpret official statements from governments and many more events have eventually led to the fall in prices.
Why all other altcoins go down?
Alternative crypto curves or commonly called altcoins - either created as tokens on ethereum platforms or with their own blockchain and aiming to build the next bitcoin or next ethereum - no matter what the value they give are all on the same downward trend and Diagrams look more or less the same.
The reason for this is mainly that they are all traded with a base coin and that is King Bitcoin! Almost all major exchanges trade other coins with BTC pairs. This means that people should have bitcoin to trade with other currencies. When the bitcoin falls down, people panic and sell (not experienced dealers but many others) or some people convert their alts back to bitcoin to be safe. The result is further decline in demand for altars and they will go south.
Therefore, most of the coins have the same chart pattern as bitcoin.
WTF is a correction?
This is a favorite term for many experienced bitcoin investors, believers and retailers. Correction is something you look for a massive and exponential increase in the value of something. This generally happens as the product or asset could have been overrated because of hype and overcrowded by people. When it reaches the point when there are no speculative buyers - the price begins to fall until it finds support (high demand at a given price).
For each wild drive based on pure speculation we must see a downturn because it is not the actual price for that asset. When the hype ends, the price must return to a fair value, and this is called correction.
Correction can also lead to panic, sold by few amateur investors, as they will be afraid of loss and sell more. Not only panic sellers, they could again trigger stop order orders and bring the price even more down - this situation will lead to oversold mode and will be a good buy option. It is therefore after any healthy correction that there will be an uptrend.
