For starters, there is the long-term trend but that isn't fundamental. This aside regulation is a big driver in the sentiment of the market at the moment. A lot of institutional investors are still on the sidelines waiting for proper regulatory guidance in place before jumping in. Bitcoin is one of the rare examples of the average joe entering the market before the big institutional investors. Almost always institutional investors get first dibs on opportunities usually in the format of venture capital funding, IPOs etc. Not long ago there was a G20 meeting discussing cryptocurrencies so there was quite a bit of uncertainty around this and the result of the meeting was positive but still lacked action. So we may have to give it more time however once proper guidance is in place I would expect to see a surge from institutional investors. Other factors that could drive the price up is China lifting their exchange ban that was largely driven by lack of oversight around ICOs. Meanwhile, you have Nasdaq looking to introduce BTC futures which will possibly encourage the growth of BTC ETF trackers and help reduce the ridiculous premiums around the current BTC ETF trackers available. BTC ETFs currently carry big premiums because it's currently the only way to 'hold' cryptocurrencies in a tax efficient account (at least in the US).
From a tech perspective, the lightning network also went live recently which will help address some of the scalability and fee concerns surrounding Bitcoin. This was released on the main net and there is already
1100 nodes running. The technology is still essentially being tested but it's gaining quicker momentum than anticipated. There is also the recent segwit adoption from major exchanges such as Coinbase and Bitfinex which should also help reduce fees.
As far as markets by size go the cryptocurrency market is tiny in comparison. Take a look
here for a great visualisation.
As far as theories go for the cause of the downturn in the first place one of the theories included the Mt Gox trustee selling $400 million-worth of bitcoin BTC to deal with the Mt Gox bankruptcy administration in order to cover obligations from the creditors. This just happened to take place January through February this year when the downtrend started taking place. The positive note is that the creditor's obligations are believed to have been met now. The trustee claims he sold OTC in order to not affect the BTC price however regardless whether the trustee sold via OTC or not he is still filling a portion of the liquidity. In order to continue selling more BTC the trustee must now get approval from the Japanese courts. The trustee has not stated how he intends to distribute the remaining BTC to clients so there continues to be uncertainty around that. The remaining BTC in possession of this trustee is $1.18 billion. Other theories due to the sell-off are related to the new tax year. The US has to pay tax on every crypto to crypto transaction. There is no doubt some will have sold off some of their cryptocurrencies in order to cover their tax obligations. If we start seeing a reversal towards the end of April you'll know the main driver.
