Start of New Cryptocurrency Bull Market Near

The correction we are experiencing right now in cryptocurrencies is almost over and the recent upturn could be the beginning of a new sustained uptrend. I know I am stepping out on a limb by making such a declaration but I think this is the case for a variety of reasons.

One of the primary reasons I feel this is the case is that the price of Bitcoin has fallen to just above the cost of mining one bitcoin. I have been told that the estimated cost to mine a single Bitcoin is around $6,000 USD. If Bitcoin falls below this price then Bitcoin miners will begin to lose money on their activities which will result in a steady decline in the number of Bitcoin miners thus reducing the amount of new supply of Bitcoin. When Bitcoin miners receive Bitcoin for their work I suspect that the vast majority of this Bitcoin is sold in order to fund their operations. As less Bitcoin is mined there will be less Bitcoin given and thus the amount of Bitcoin sold will be less thus with demand staying constant will cause the price of Bitcoin to rise.

The current cryptocurrency market in dominated by the price action of bitcoin. The correlation is very high between Bitcoin and the vast majority of altcoins so if Bitcoin can begin recovering the overall cryptocurrency market will recover as well. The recent downturn was caused by Bitcoin and hype around its possible use in society. I think over time the correlation will diminish but for now it will remain high so a recovery in Bitcoin bodes well for the entire cryptocurrency market.

Another reason I suspect that the downturn is coming to an end is that we have experienced about six months of a correction which has been enough time to let out all the steam that was created in the spike in prices Bitcoin and altcoins at the end of 2017 early 2018. The market has become very pessimistic with many investors now feeling that prices are likely headed lower. Those investors that were optimistic have been beaten like a red headed step child and the general market feeling has become very pessimistic. This pessimism has been around for a few months so that any investors thinking of selling have sold their coins leaving only long term holders who are not likely to sell even if prices go lower. All the weak hands have sold leaving remaining coins in strong hands which will be the foundation of the next bull market.

I think the cost of Bitcoin and the fact that most weak or temporary investors have left the market gives me confidence that we could be entering the recovery stage in the market cycle. The recent price action of some altcoins reflect this turn so I think it is worthwhile investing in some altcoins that are poised to grow substantially from here. In future posts I will go over some of these altcoin ideas. Good luck everyone.