Is the bull run in the digital currency market coming to an end? Analysts say it’s just a halftime break

The prices of major cryptocurrencies have fallen sharply in the past 48 hours, which analysts attribute to profit-taking by early investors.

Overall, the total market capitalization of the cryptocurrency market has fallen to $91.4 billion today, down more than 20% from its all-time high of $117.2 billion in mid-June.

As of press time, the market capitalization of the top 20 cryptocurrencies has plummeted in the past 24 hours.

Charles Hayter, co-founder and CEO of leveraged cryptocurrency trading platform CryptoCompare, commented that as the media portrays the market as one where it is easy to make money, investors are drawn in without knowing what they are getting into.

He talked about some recent events:

“This price correction is inevitable.”

As of press time, Bitcoin is down nearly 7% in 24 hours, while ETH, the token of the Ethereum blockchain, is down nearly 20%.

Profit-taking

Other traders echoed Hayter’s comments, saying some early traders were cashing out.

“People are leaving the cryptocurrency market and converting their holdings into fiat,” Hayter told reporters.

Investor and cryptocurrency hedge fund manager Tim Enneking provided further details, stressing that while some traders held on to cryptocurrencies, others chose to convert them into fiat currencies, a factor that played a major role in the pullback.

He said:

“Some people choose to trade cryptocurrencies only, but others trade cryptocurrencies as well as fiat currencies, and the latter have a more diverse selection.”

In addition, there is a characteristic of the cryptocurrency market that the price trends of most cryptocurrencies will follow the price trends of market leaders.

“We are seeing a very strong correlation between Bitcoin and other cryptocurrencies,” Enneking said. “When Bitcoin crashes, the rest of the market crashes as well (as we have seen in the past 48 hours).”

Is the bull market coming to an end?

Although major cryptocurrencies have seen a sharp drop in price recently, some traders told reporters that this may not mean that the bull market has come to an end.

The market capitalization of all cryptocurrencies has increased by more than 400% so far this year, and after such a sharp rise, a brief pullback among major cryptocurrencies is healthy, Enneking told reporters.

Sean Walsh, founder of Redwood City Ventures, expressed his optimism:

“All investments (even good ones like cryptocurrencies) have a breathing rate. They tend to breathe ‘in cycles’ as prices inevitably climb upwards and move outwards in adoption.”