Are we about to enter the bear market?

As the CoinMarketCap front page turns all red, and the total crypto market cap is in free fall, the question on everyone’s minds must be is this the end of the most exuberant market we’ve seen since the dot-com bubble?

The short answer to this long question is NO, and here’s why:

1) Market Volatility

According to Buy Bitcoin Worldwide, bitcoin volatility is currently at 6.50% with a peak on August 8th of 7.08%. This means that we are likely to see further bitcoin price correction, however we are far from anything worth panicking over.

2) We’ve just seen one of the most exuberant run ups of any market in history. A correction was in fact long overdue at this stage, so it’s actually a welcome sign.

3) Bear market would mean a long term negative price action of over a year or two (like hibernation), and that’s highly unlikely in this exciting, developing and very young market.

4) The volume of sell-off hasn’t been that substantial (like it was during the china ban for example).

5) Thanks to the recent Futures fomo and the flood of new investors, Bitcoin, as the market leader, had moved very far away from its 50-day moving average (currently around $12,000) and until price collapses below this level, we are still in safe territory.

6) Bitcoin dominance is still quite high at around 45% range, so the alt-coins have a lot of room to grow. In the long term a healthier bitcoin dominance would be around 25%, but for the moment, we can expect to see a drop to around 35%.

7) Bitcoin still has a few tricks left up it’s sleeve, like the lightning network, so it has lots of potential to grow.

8) Other crypto-currencies and alt-coins like Ripple, Lisk, Stratus, Ark, Litecoin, Ethereum and IOTA are actually holding up quite well.

Conclusion

Most likely this is just another healthy, if fairly substantial, correction of the over exuberant market and there is nothing to worry about for the long term.