Why the Crypto Market Remains Moderately Bearish in 2019

bitcoin price bear market

With the exception of Ethereum, which seems to have started the year with all guns blazing ahead of the Constantinople fork, it wont surprise anyone that the market analysts SFOX rate crypto as moderately bearish entering 2019. In fact, with further sharp drops in all major coins today, perhaps even the word moderately is wishful thinking.

bitcoin SFOXSource: SFOX Volatility Report

However, unlike many price predictions based on the instincts of even the most credible CEO or economist, the SFOX Volatility Report is based on more than just sentiment.

The cryptocurrency dealer and market analyst takes into account trading volume, price, and volatility data from eight major exchanges. They then come up with an index by analyzing three major factors: market sentiment, volatility, and how the sector, in general, is advancing.

Throughout 2018, this index ranged from highly bullish to positively bearish with November and December the most volatile months on record.

What Drove Volatility in 2018?

A hellish November aside, SFOX pinpointed two other major periods in the year when cryptocurrency volatility saw increased spikes. These were between January and late February and mid-August through September. What happened to send the markets swinging? A whole bunch of external events placing pressure on prices.

To start with, towards the end of January there was a major hack on Japanese exchange Coincheck. Thieves made off with north of $500 million in NEM. China began to talk about banning cryptocurrency, and Facebook prevented ICOs from advertising on its social media platform.

To add insult to injury, concerns rippled through the industry about Bitfinex and Tether. Their alleged role in manipulating the market during 2017s late rally was thrust into question as both companies were handed a subpoena by the CFTC. SFOX notes:

From Jan 28 to Feb 6, the price of BTC dropped from $11,670 USD to $6,828 USD.

After a sensational year for crypto in 2017, the 30-day historical volatility of Bitcoin in early 2018 went from 117 percent on Jan 28 to a whopping 139 percent on February 17. Naturally, all major crypto assets followed suit.

The Next Major Sucker Punch: Mid-August through September

During this time period, all crypto prices began to spiral once more due to a se ...

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Tags: Market sentiment, Exchange-traded fund, Ethereum, Constantinople, China