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Bitcoin (BTC-USD), Ethereum (ETH-USD), and Ripple (XRP) have extended their declines and dropped below their recent lows of two weeks ago.

It appears that favorable reaction to endorsements by governments and world financial leaders might have run its course. Sharply higher prices and expectations for further increases were likely overdone.

Looking at the bigger picture, other assets (gold, silver, bonds) have shown signs of weakness, too. This could be attributable to the pervasive threat of a liquidity crisis.

Coupled with a potential credit collapse and a stronger USD, there is ample justification for further downside.

A 'RIPPLE' EFFECT?
 

A break to the downside in bond prices, or a decisive break to the upside in the U.S. dollar, could easily trigger strong selling on high volume in any of the markets. This is especially true of stocks, which, up to now, seem oblivious to any of the warning signs.

Those warning signs include continued weakness in the labor market and the economy. Corporate layoffs, downsizing, and empty office buildings say more about what is ahead of us than most observers are willing to admit - if they are even aware of the implications.

CONCLUSION 
 

Bitcoin still drives the crypto market, but the bigger volatility percentage-wise will come in Ethereum and Ripple.

Retail investors in Bitcoin, Ethereum, and Ripple should reconsider their lofty expectations and be prepared for additional price declines. Traders should be prepared to wait for a price washout before buying back in. (Also see The Rush To Regulate Crypto)

More By This Author:

Price Declines In Crypto; Ripple Leads The Way Down
More Downside For Gold And Silver?
The Case For Gold Has Nothing To Do With Its Price