Mike Murphy wrote:The downtrend in Bitcoin is a major cause of capital flight out of the altcoin markets like Maxcoin. This is a repeating cycle which has been seen before with Litecoin and Namecoin. When capital returns to the Bitcoin market then these new holders will begin to divest into alcoins once more. The market is spooked, plain and simple. But it's nothing we haven't seen before. And in fact, it's not as bad this time around as it has been in previous hype-cycles.
In addition, Maxcoin is heavily dependent on Bitcoin at the moment as it is the only way to obtain it. When more fiat exchanges emerge, it will begin to decouple from Bitcoin and stand on it's own merits.
The reason that guys talking down the price of Maxcoin is simple: they want to increase their holdings as much as possible to profit even more when the price of Maxcoin inevitably rises. This downtrend has been manufactured by the large hashers and holders of the coin to shake weak hands out of the market. And it is now so oversold that the next upswing in price will be even more spectacular than the last one.
Each time the price dumps as it has over the past few weeks, the distribution of the coin increases and this reduces the ability of a minority of holders to undertake these dumps in the future. In addition, when prices are as low as they are right now, it is trivially easy for whales to manipulate the price and keep it down to stock up on as many cheap maxcoins as they can.
We have seen this all before with Bitcoin. It just ensures that when the supply of cheap coins from miners selling under the cost of production runs out, the price will rise to meet the new supply and demand situation.
It would also not surprise me to find out that some of the people mining this coin are only mining it because they have an active interest in seeing it fail, and are instantly dumping their coins on the market to suppress the price and keep it from rising. But if this is actually occurring, there is only so long that this kind of market manipulation can go on before the culprits lose too much money to continue doing it. Or else, it becomes more in their interest to hold the coin if they suspect the price is going to rise anyway.
Also, when the downtrend reverses, you will rapidly see sentiment shift to manic bullishness and the same people who have pronounced the death of Maxcoin will proclaim it's virtues. The reason I am confidant in Maxcoin is because I have seen this all before in the early days of Bitcoin. In fact, I think Bitcoin suffered far more from the effects of this kind of trolling. Now the big players understand the game a lot better. Maxcoin is going to surprise everyone, and I am sure by this time next year, those who have proclaimed the death of this coin are going to look very foolish indeed.
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