In the investment world, confidence is one of the most important aspects. It is confidence that makes people invest in small unprofitable companies with the hopes that they will improve. It is also confidence that makes investors like Warren Buffet buy and hold stocks for years. They believe in the company’s products and management. Therefore, when confidence is lost, the market will always tank.

Sadly, this is what has happened in the cryptocurrencies industry. In the past week, the market capitalization of all cryptocurrencies tracked by Coin Market Cap has declined from $220 billion to $160 billion. This is a sad decline from the peak of $800 billion in January. The price of Bitcoin has dropped below $5,000 while that of Ethereum is trading at $150.

The decline in cryptocurrencies in the past one week has been mostly about confidence. It all started when differences between the developers of Bitcoin Cash and the miners disagreed on the future of the currency. This disagreement led them to part ways through a process known as hard forking. When a fork happens, a new cryptocurrency is created. Last year, Bitcoin Cash was created when a Bitcoin fork happened.

As mentioned above, in the financial market, confidence is the most important thing. The forking of Bitcoin Cash led to a loss of confidence in the cryptocurrencies. This is because no one wants to own a currency that will be diluted in the next period of time. This is true even with the stock market. Here, no one would like to own a stock which will continue to be diluted.

Unfortunately, the forking of Bitcoin Cash happened at a difficult period in the cryptocurrencies industry. It happened when there are credible doubts about the future of the industry. In the investment community, the role of cryptocurrencies has been analyzed and many believe that the industry may not last as it is. This is because of the increased number of scams that have emerged. In addition, there are concerns about the adoption of the currencies with many companies ignoring them.

The BTC/USD pair has reached at 4581. This is the lowest level this year. The price is below all the important moving averages. The RSI for the pair is at 10, while the MACD shows signs of further downward pressure. As confidence eases, the pair will likely continue moving lower. Traders should watch out for the important psychological level of 4500.

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