On December 7, the Bitcoin price achieved a new yearly low, as the valuation of the crypto market fell by $16 billion within a 24-hour span.
Bitcoin Price Struggles to Recover from New Yearly Low
Bitcoin (BTC) fell to as low as $3,210 on fiat-to-cryptocurrency exchanges like Bitstamp and Coinbase, which led other major cryptocurrencies and low market cap digital assets to fall by around 15 to 20 percent against the U.S. dollar.
Since then, the Bitcoin price has rebounded from $3,210 to $3,455, by more than seven percent within merely 12 hours.
However, traders are cautious in regards to the short-term price trend of the dominant cryptocurrency given the intensity of its recent fall and the volatility the market has shown throughout the past two weeks.
Factors and Trends
Positive developments continue to surround the cryptocurrency market as large financial institutions in the likes of Nasdaq and Fidelity make big bets on emerging infrastructure providers like ErisX, a strictly regulated cryptocurrency exchange in the U.S. market.
Yet, the prices of major cryptocurrencies are falling at a rapid rate, in most cases with low volume, suggesting that many assets are free-falling without high sell pressure.
As technical analyst DonAlt said, Bitcoin still remains below an important resistance level at $3,700, and the failure to break out of it could result in the asset remaining in a low price range between $3,000 and $3,500.
The analyst explained:
“Decent day with quite a big bounce across the board. That said BTC is still below resistance. If BTC wants to turn bullish on larger time frames I’d really wanna see it manage to reclaim the lowest zone on the chart ($3,740).”
In a bear market, especially in crypto, the prices of major cryptocurrencies tend to drop by large margins, unaffected by developments in the sector. For instance, several reports claimed earlier this week that the delay of the Bitcoin exchange-traded fund (ETF) of VanEck by the U.S. Securities and Exchange Commission (SEC) caused the price of BTC to drop substantially.
However, the delay of the VanEck ETF to February was expected by many investors in the traditional financial market because the SEC does not have any motive to go out of its way to prematurely approve an ETF prior to its final deadline.
Even if a Bitcoin ETF was to be approved or rejected, the event would likely have minimal impact on the current state of the market, because the market is so overwhelmed.
For Bitcoin to recover, the market has to start demonstrating exhaustion and extreme fatigue from the steep sell-off. Historically, in 2010, 2012, and 2015, BTC dropped by around 85 percent, underwent a several-month-long consolidation and accumulation phase, before engaging in a proper recovery.
The bear market of the cryptocurrency market will likely extend to 2019, and regardless of major developments that lay ahead including the VanEck Bitcoin ETF decision in February and the scheduled launch of the Bakkt futures market in January, the market will only begin to recover when bears and sellers lose momentum and control over the market.
Bitcoin (BTC/USD) forecast and analysis on October 18, 2019
Cryptocurrency Bitcoin (BTC/USD) is trading at 7991. Cryptocurrency quotes are trading below the moving average with a period of 55. This indicates a bearish trend on Bitcoin. At the moment, cryptocurrency quotes are moving near the lower border of the Bollinger Bands indicator stripes.
Bitcoin (BTC/USD) forecast and analysis on October 18, 2019
As part of the Bitcoin exchange rate forecast, a test level of 8200 is expected. Where can we expect an attempt to continue the fall of BTC/USD and the further development of the downward trend. The purpose of this movement is the area near the level of 7260. The conservative area for Bitcoin sales is located near the upper border of the Bollinger Bands indicator strip at 8420.
Cancellation of the option to continue the depreciation of Bitcoin will be a breakdown of the upper border of the Bollinger Bands indicator stripes. As well as a moving average with a period of 55 and closing of quotations of the pair above the area of 8540. This will indicate a change in the current trend in favor of the bullish for BTC/USD. In case of breakdown of the lower border of the Bollinger Bands indicator bands, one should expect acceleration of the fall of the cryptocurrency.
Bitcoin (BTC/USD) forecast and analysis on October 18, 2019 implies a test level of 8200. Further, it is expected to continue falling to the area below the level of 7260. The conservative area for selling Bitcoin is located area of 8420. Canceling the option of falling cryptocurrency will be a breakdown of the level of 8540. In this case, we can expect continuation growth.
Bitcoin re-enters $8,000-zone, but what is its upside potential? – Confluence Detector
- BTC/USD went up from $7,998.50 to $8,077.50 this Thursday.
- The daily confluence detector shows two healthy resistance levels to overcome on the upside.
Following two straight bearish days, which took the price below the $8,000-zone, BTC/USD is on the course to recovery. Bitcoin had gone up from $7,998.50 to $8,077.50 this Thursday before it improved further to $8,087.40 this Friday. The hourly BTC/USD chart shows us that the market found intra-day resistance at $7,943.15 before it bounced up to $8,075. Since then, the price trended horizontally for a bit, negotiating with the $8,090 resistance line. The bulls managed to rally together to break past it and go up to $8,110, before correcting itself to $8,087.40.
BTC/USD daily confluence detector
The daily confluence detector has two healthy resistance levels at $8,190 and $8,260. $8,190 has the five-day Simple Moving Average (SMA 5) and one-week Fibonacci 61.8% retracement level. $8,260 has the SMA 100, one-day Pivot Point resistance two and one-day Bollinger Band middle curve.
On the downside, there is a support level of note at $8,065, which has the SMA 5, SMA 50, SMA 200, one-hour Bollinger band middle curve, one-day Fibonacci 38.2% retracement level and one-hour previous low.
Bitcoin could become store of value, as institutional interest increases
Institutional interest in Bitcoin has seen a significant rise in 2019, as several derivative financial products on top of Bitcoin have flooded the market. Active exposure of these investors to the digital asset realm has brought back the debate about whether Bitcoin is the new “store of value.” According to Grayscale’s managing director Michael Sonnenshein, there has been a certain shift in perception for sure.
Sonnenshein appeared on ‘The Scoop‘ recently to discuss the impact of institutional investor’s exposure to the digital asset class. The managing director of the firm believed that although Gold has been the standard store of value for centuries, and it made sense in the physical age, but given the rapid growth of the digital monetary age, Bitcoin for sure is challenging to become the new store of value. He explained,
“It is now nearly 2020 and we’re starting to ask investors with this question which is, what constitutes a store of value? It historically has been gold but that may have made more sense for a physical age. As we are in fully immersing ourselves now in this digital age perhaps gold doesn’t hold up as much as it once did as that store of value and perhaps investors need to think about a digital store of value such as Bitcoin.”
Institutional investors hold the key for Bitcoin and any other digital asset to gain mainstream adoption, and as of today they are more aware and learned about Bitcoin and its potential as an investment than ever before. More importantly, these investors are using Bitcoin as a hedge fund and store of value to diversify their investment portfolio as well as make quick capital gains on their investment.
The increasing interest of institutional investors is evident from the fact that GrayScale registered its highest gain in the last quarter with over $250 million raised from the investors, Binance has registered the highest daily volumes of over $700 million from its Binance futures platforms. Bakkt has launched its futures contracts recently while CME’s futures contracts year-to-date volumes have seen a significant rise over the past year.