Dear Steemians,

as you all know most graphs are down trends, I will go through my analysis on the main reason why and then explain what are the next best action that you (are trader/holder) can do. Disclaimer: as usual don't invest more than you can lose because at the end of the day all the cryptos may end up in a single big zero!

1st of August

A modification to the current bitcoin protocol is scheduled to happen. This is the Segwit activation which has been supported by the majority of "users". In parallel to this proposal there is also the block-size increase proposal which instead has been put forward by "miners", in particular miners will activate Segwit, but a couple of months later also activate the 2Mb block increase.

The reason why this is perceived as a risk is that miners are putting forward their own decision with or without user consent. So the historic userbase of bitcoin feels this is the first step against decentralization. Bitcoin historical users fears that a coalition of miners and hardware manufacturer are creating the first precedent record of a centralized group imposing its will over the decentralized bitcoin.

Market overestimates clear risks (and underestimates unclear ones)

This is a general model of speculative markets, if a risk is known the market will respond with a strong reaction (over reaction). When the risk is not very well known or foggy it will respond with a weak reaction. I honestly believe that the market is over reacting because the scenario is very clear, the code is clear, who are the parties involved is clear, everything about this act is clear.

Ethereum record

ETH/ETC also had a strong community argument, 1 year and a couple of months ago. What happened during the break? Prices went really down, then slowly they recovered until pumping up to crazy values. What I learn from this is that if the technology has use-cases (the ICO have been the main application for ETH so far) it will eventually recover, no matter how hard was the split.

My deduction

• I have been expecting price drops before the 1st of August (and I will expect more even when 2x will be unlocked). So far this is happening as I have seen large chunks of bitcoin being sold to "sit it out" (meaning convert all the bitcoins to fiat and wait to see what happens).
• I believe that the market is over reacting, because there is very little uncertainty about the actors, the changes and the dates.
• I know bitcoin has some real industry applications which cannot be stop form one day to the other, even in a worst case scenario of a chain split, this will force at least one of the two chain to keep on working.

These points means that from an industrial point of view there will be very little chances in the long run that bitcoin will lose all its value for this.

Why are other cryptos going down to?

Market are efficient, say they were not, it would be trivial to trade in a way that will make you big earning, if BTC is going down wrt USD, say XRP/BTC is not going down, it means that XRP would be getting "fake" value. But this cannot happen without the market noticing it, so good traders sell first the one, than the other, checking where they can margin by buying back. And keeping this sell cycle the market aligns the ratios between currencies so that there is no "fake" value created. In this situation you can see if BTC is still the king, and it is, since it brought down all other valuations (i.e. it is still the reference value in the crypto currency world)

What to do?

Sitting it out is the safe way, you can also try to run with the bull trap you see in the bounce and make some more profit. I honestly believe that there will be lower prices at least up until the 1st of August. In this scenario you will have the safest approach to save the fiat value of your portfolio to re-invest later.
Remove bitcoins from exchanges? If you are a techie and you will be able to handle whatever they throw at you then do it, but it can get technical, let's say there will be a chain split, you will be entitled on coins on both chains, but you should probably go through some operations (maybe easy for you, maybe difficult). If you are not a techie you could entrust a respected exchange (like kraken) to honor the fact that they will give to you your other chain coins in case of split. Basically if you were holding ETH after the split day you were holding both ETH and ETC, but if the wallet is on an exchange it depends on the exchange if they want to give to you also the other "new" coins.

What will I do?

Being reckless as I am, I am uploading fiat to Kraken and I will buy as much as I can on the 1st of August. Don't do this at home, may result in harsh financial losses! I trust Kraken to honor the eventual double wallet (as they already did in the past, moreover they have a pristine reputation so far).

I hope you enjoyed and hit me up if you like to discuss more!