The Crypto market is crashing and here’s why you shouldn’t panic. Early last week, there was a lot of fear and uncertainty in the market because of the South Korean Government. South Korea makes up for the largest section of the market globally and there were rumours of the government banning cryptocurrency trade completely. But no such thing happened!
Early last week, the South Korean government raided the major banks to make sure they did enough to prevent money laundering through cryptocurrencies. Later that week, they also raided major exchanges to make sure they took enough steps to follow the KYC process they had to do. To top it off, on Friday the Justice Minister announced plans to pass a bill to completely ban cryptocurrency trading which started the domino effect.
A lot of negative news in the South Korean market in such a short span of time spread fear, fuelling a huge sell-off. But the important part is, none of the news stories were new or significant. The South Korean government cautioned both banks and exchanges way back in December to follow proper procedures. They just raided them to make sure the books were right. It is only fair that the South Korean government makes sure all the laws are followed properly.
With the Bill to block cryptocurrencies, it was refuted by other government agencies. The bill, once completed would have to get a majority vote in the legislative assemble to go through. But before that happens, the bill does not have support from any government agencies and has already received 150,000 signatures from people of South Korea to block the Bill. The South Korean government would have to respond to the petition if it reaches 200,000 votes by January 27. The idea of a bill to block cryptocurrencies had not worked well with the people and and received a lot of backlash. The Justice Minister announced that they’ll be looking into it again.
In short, the market is reeling with with a flash-crash because of insignificant news. Once the market understands this, it will be back stronger. Most of the coins are right around their support levels or even below it. Think of this as a sale and pick up coins you’ve wanted to buy. This is the perfect time to enter the market. But any trade you make, it is absolutely necessary that you set a stop-loss for it.
At the time of writing this article, it looks like the bounce-off has already started. The biggest cryptocurrency Bitcoin, went to a low of $10,900 before bouncing back and is currently trading at $11,900. Most of the coins have started showing signs of recovery. Expect to see some short term resistance which will be broken down if there is enough buy volume.