The New York blockchain startup Chainalysis analyzed the reasons of more than triple falling of the price of bitcoin from a mark of $20 000 to $6 000 in the report “The Great Bitcoin Price Dip: Its Causes and a Way Forward”.
Chainalysis is sure that bulk selling of bitcoins was provoked by tough actions from regulators, while the price of bitcoin only arose the positive spirit of investors which wasn’t supported by fundamental driving forces pushed up. As a result, it has resulted in “gregarious behavior” against the background of the growing correlation between various exchanges and cryptocurrencies.
Analysts of a startup also pointed to the fact that the number of search queries grew in Google quicker than the price of the first cryptocurrency, therefore, the bitcoin couldn’t support long “mad” ascending trajectory.
In December 2017 and January 2018 the trading volumes on various platforms began to correlate almost completely — what occurred at one exchange, at once repeated on another. If “whales” on one platform began to sell, it occurred everywhere.
In December investors bought more cryptocurrencies than sold. that led to a sharp gap between a supply and a demand. So, the market couldn’t keep high prices, considering this circumstance.
Besides, the prices of bitcoin and altcoins also showed the increased correlation that led to the similar descending movement of all cryptocurrencies.