This is my first time experiencing a full market cycle in the crypto world. I dipped my toes in the crypto water about a year ago. Bought almost near the top (like most noobs) at around $2400 which seems like it was a few years ago. Sucked at the time, but mix that learning experience with what I was learned over this past few months and I have formed my thesis that the current dry market is nothing more than a much needed shakeout for many reasons.
First off a market cant go up forever. A cool off period was definitely needed. Mix that with the rush of new investors (retail and institutional) jumping in without knowing the first thing about crypto and in hindsight it was so obvious that this would take place. The first thing you have to understand (and embrace) about the crypto market is that it is heavily manipulated. It is not necessarily a bad thing if you understand the manipulator's mentalities. The big money has been in for a while and are in control. You can tell from the in this chart that big money exited near the top and I personally think they're waiting until around the 200EMA to jump back in. The market was in pure euphoria. The uneducated need to be washed out, and the Wall Street money (that was able to enter around the top) that thinks shorting bitcoin is easy money need to learn the hard way how this game is played. This shakeout was the only way.
There are more people in this market than ever before. The fundamentals for bitcoin are better than they have ever been. The mainstream adoption has recently exploded and is increasing by the day. So, why in the world is the price a little over 50% removed from it's highs? I believe big money is manipulating the market to paint a beautiful overall picture. Every nice chart I've seen in the last few weeks is met with a monster dump to ruin it (i wonder why). When the euphoria is that high then there are two options. Let the market take off when proper scaling from exchanges is nonexistent and the technology isn't even close to fully ready yet which would lead to a massive bubble pop, or create a much needed correction with a beautiful shakeout while staying above the 200EMA? (Daily close below the 200EMA which be very ). The latter had to happen. It was healthiest way. Exchanges couldn't handle the newfound demand. Bitcoin fees were out of control due to transaction traffic. But scaling solutions are on the way.
The most I have learned about the crypto market, and markets in general, recently from close observation is the human psychology of them. If you understand the psychology you will be a lot more successful. I am already seeing people whom were ultra-bullish in December currently defeated exclaiming that we're officially in a bear market and that were going way under 8K. These are the kind of people who must be shaken out before the next move upwards. When you observe how others let their emotions get the best of them it really helps you get a better grasp of the overall market.
This is long enough for today so I will finish it with this. I am no expert. I could be dead wrong here. But I have studied a lot of information and I just don't see a daily close under the 200EMA happening. As long as we close the daily above the 200EMA we are still technically , and I do not think the market manipulators want to lose the grasp of that overall sentiment quite yet. There is so much positive news and good things coming in this market in 2018 that there is no way they will allow this massive opportunity to fall by the waist-side. This is just a healthy gearing up for the next move to new highs in the coming few months.