The third and fourth quarter of 2018 have been punishing for cryptocurrencies, and we are headed into the seasonal slump around the holidays. Sentiment is bearish for the sector, with the market
Bitcoin is in control of the cryptocurrency market, with a 54% dominance. This has historically indicated that as BTC moves, so does the market. Last week, the cryptocurrency market declined a shocking total of $19 billion or 10%. A major factor for this fall was likely the sharply declining stock market, with the DJIA declining 6.6% (1,776 points). Investors are selling off risky assets due to the Fed raising interest rates and the fears of global economies in the emerging markets and Europe declining. As the interest rates rise, everyone who holds debt must pay more to service it.
Quarter 1 of 2019 could follow the seasonal trends we see in the cryptocurrency market. Last year, the market picked up in March and April and dipped shortly thereafter.
Some major headwinds:
Coinbase index fund cancelled
Bitcoin ETF creation
Government regulations in China, India and the United States
Cheapening fees on major indicies
The adoption of cryptocurrency based social media due to the FB hack
Payment for consumer goods using cryptocurrency
A stock market correction
What does Bitcoin and the cryptocurrency market have in store for Q1 2019? I believe we are headed into a 6-month bear market where Bitcoin could dip to $4,000/coin. We could see the market contract to $100 billion or less. I am waiting on the sidelines to buy in Q1 2019.