When it comes to trading cryptocurrency, what goes up quickly, often falls quickly. After seeing a bitcoin bull run up of 24% from $960 on New Year's day to its local peak at $1190 on January 5th, bitcoin crashed 30% to low $800s by January 7th on word that the Yuan had its strongest 2 day performance and that the People's Bank of China (PBOC) met with the Chinese bitcoin exchanges regarding regulation and practices.

My suspicion is that the crash in price was probably triggered by the strengthening of the Yuan and the regulatory meeting with Chinese exchanges, but was probably amplified by shorts and insider trading in China. As 90% of exchange trading takes place in China, any word from China regarding the valuation of the Yuan or regulation on Chinese exchanges is sure to affect the price, as it has on virtually every occasion to date over the past 3 to 4 years. Furthermore, as insider trading cryptocurrency is not illegal, I highly suspect that short positions were made and profits taken on the expected outcome of these announcements. This probably resulted in the accelerated rate at which bitcoin lost its prior 2 weeks of gains in just 2 days. Nevertheless, most cryptocurrency traders, agree that both technical analysis and macro analysis indicate that bitcoin is overall still in a bull run. The fundamentals have not changed. The PBOC has made no indication that they plan on imposing any further regulation on Chinese exchanges to curb capital outflow, and they have failed to impose any regulation during prior meetings as well over the years. Although the Chinese government took measures that temporarily strengthened the Yuan, it is unlikely that they stopped its overall bearish trend. I suspect bitcoin will continue to rise after this correction which could last days or weeks.

Regardless though, with bitcoin's presence in the headlines over the past few weeks, there has been a renewed interest in cryptocurrency with new money entering the market. As bitcoin began to reach its peak in the weeks leading up to January 5th, we saw the T&C Alt 20 Index begin to accelerate upward with bitcoin, breaking the previous months' trend where altcoins suffered losses as bitcoin continued to ascend.

The T&C Alt 20 Index obviously corrected as bitcoin suffered its major crash over the past 3 days, but as this correction stabilizes, the hope of catching the next breakthrough altcoin will begin. We will begin to hear announcements of major developer updates in many of the altcoins, which will lead to pumps of up to 5 to 10 fold in some altcoins. Some major updates coming out over the next two months include Waves' DEX and Fiat Gateways, SiaCoin's Minebox, Dash's "Sentinel Release" of its Version 12.1 software on February 5th, 2017, MaidSafeCoin releasing further public tests of Vaults in their decentralized internet, Stratis' Full Nodes release, and more developments that we don't even know of yet. For now, as I've stressed in previous posts, both the low liquidity on Bittrex combined with the massive potential of their product, Waves stands out in my mind as one of the best investments at this time.

In summary, we believe that altcoins will soon see the bull market that we've been patiently waiting months to see. When the T&C Alt 20 Index shows some semblance of bottoming out after this bitcoin correction, we will continue to buy into altcoins, focusing our purchases on the altcoins with development updates and announcements in January and February of 2017. In the upcoming days, I will begin regular updates regarding pending announcements, rumors and technological developments for many of the altcoins.