Bitcoin is about to reach another milestone, but not in a good way.
As of Friday, the cryptocurrency was trading at 50 percent below where it started 2018. The decline over the past three months is in stark contrast to the three months leading up to start of the year when bitcoin tripled in price.
It’s not just bitcoin that has been suffering. Ether, the token of the Ethereum platform, is also down close to 50 percent year-to-date. It’s even worse for Ripple’s XRP; that token is off by nearly 80 percent since the start of 2018.
Those practitioners of technical analysis—that is, the use of charts to explain and predict price moves—will say that bitcoin has gone through a “death cross”. That’s when the 50-day moving average of prices is below the 200-day moving average. When such a move occurs, it’s a sign of lower prices to come.
But that’s like blaming a camera for looking ugly in a photo.
Folks can cite crypto-friendly Japan’s recent crackdown on exchanges as a reason for the most recent tumble but that happened as bitcoin was trading significantly down for the year already.
And then there’s the tether conspiracy theory. The 2017 flood of supply of tether, the cryptocurrency which is supposed to be backed by U.S. dollars, was blamed by more than some for bitcoin’s skyrocketing prices last year. Since the organization behind it—and its sister company, the Bitfinex exchange—started a banking relationship with the Netherlands’s ING in late January/early February, tether printing has been relatively flat, save for a $300 million jolt a couple of weeks ago.
Well, wouldn’t ya know it? The price of bitcoin fell as the supply of tether stopped increasing.
Still, the simplest explanation may be the best: The party is over. Fewer people are googling “bitcoin” and it’s no longer the talk at pizzerias and nail salons. The Ralph Kramden-level dream of getting rich quick didn’t material for most retail cryptocurrency investors and they bailed.
Yet there’s good news to be had in this death cross business. There may be a resurrection, not in prices but in advancing the technology of cryptocurrencies. With the hype out of the way, developers and enthusiasts can now go back to being evangelists for a better world—at least until the next Armageddon comes.