In recent weeks, the cryptocurrency market has been on a downturn. Every currency has been in freefall, and people are scratching their heads wondering how a market that has been so bullish lately has become a bloodbath or falling prices. I attribute this falling market to two different reasons, the drama about Bitcoin scalability and a general price correction in the market .

What is happening on August 1st?

On that day, the majority of Bitcoin nodes will try and implement a proposal called BIP148, which stands for Bitcoin Improvement Proposal. This essentially is an upgrade to the Bitcoin network that miners can vote to run or not. The proposal requires that miners signal, or vote yes for other words, on Segwit. If you want to read in detail on exactly what Segwit is, you can read an article I wrote called “What is Segwit”. In simple terms, Segwit makes more room in a block for payments so more payments can processed. This will lower transaction fees and solve the issue of transaction fees being too high for the general public. However, there are a large number of people who oppose Segwit and just want blocks to become bigger instead as according to them ,this was Satoshi’s plan . I am not going to say which side I am on, as I don’t want to get any hate. If enough miners do not want Segwit to happen, they can signal the original blockchain instead, causing a potentially permanent chain split. This is why people are so freaked out about August 1st, and until then, people are going to be hesitant to put any money back into the market .

What is a price correction?

A price correction is defined as a temporary decline or setback in prices in a bullish market . This is completely normal, and signifies a healthy market. If prices kept exploding in too fast of a period, there would be a long crash, similar to the crash of Bitcoin in 2013. Prices of cryptocrruencies have doubled or even tripled in the last few months, and until now, there has not been too big of a correction. This correction signifies a market that is not parabolic.

Overall, I am nervous about the future of Bitcoin along with many others, I expect crypto prices to stay red for the next couple weeks, and depending on what happens with BIP148, Bitcoin could tank, it could explode in price, or there could be two Bitcoins as we know it. Either way, news for the cryptomarket should be exiting in the next week or two, and I cant wait to witness this potentially historic moment for not only Bitcoin, but cryptocurrency in general.

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Sources

https://hackernoon.com/casual-bitcoin-users-you-need-to-know-about-aug-1st-d568e07418cb

http://www.uasf.co/