This year has been tough for cryptocurrencies. Their market value has declined from more than $850 billion to less than $110 billion with leading cryptos such as Bitcoin suffering huge price drops.
As negative sentiment runs wild and more investors continue to dump their holdings, it is difficult to see a bright side. However, the current crash could be what is needed for the cryptocurrency industry to be successful, especially as the industry is still relatively new and volatility is to be somewhat expected.
In the late 90s, the dot-com bubble occurred. Investors rushed to invest in anything ending with dot-com. This saw valuations of worthless companies reach billions of dollars. The same thing happened in the crypto industry. Investors rushed to invest in all ICOs, even those with questionable products. In the stock market, a number of companies changed their business models to include blockchain. A good example of this was Overstock, an e-commerce company that created a blockchain arm. This led to its valuation rising to more than $3 billion. Today, it is worth $613 million.
Therefore, the current crash could be a good thing for the blockchain industry. This is because, as the value of worthless IPOs plummets, there will be value in those that solve real problems. So, amidst all the darkness and pessimism, there is an upside to the current crash.
The BTC/USD pair reached a YTD low of 3196 last week. Since then, the price has moved to the current high of 3360. On the four-hour chart, the price is below the 25-day and 50-day EMA. The RSI is at 41, which is an indication of neutrality. As sentiment falls, there is a likelihood that the price will continue moving downwards.
