Home / Bitcoin / The recent fall of Bitcoin means that rally requests for $ 25,000 in 2018 are at risk

The recent fall of Bitcoin means that rally requests for $ 25,000 in 2018 are at risk

The prices of bitcoins until now in mid-August are traded around the lows of 2018, extending a downward trend that took possession of virtual currency n. 1 in the world after a peak in May and a slight rebound in July, raising doubts about the bullish forecasts for the virtual currency.

A single bitcoin

BTCUSD, + 0.44%

on the Kraken exchange it was trading at $ 6,021.19, out of 4.1% on Tuesday. This represents a fall of about 60% in bitcoins in the first half of 2018 and a decline of 70% from the peak close to $ 20,000 at the end of 2017. In comparison, the Dow Jones Industrial Average

DJIA, + 1.46%

has gained 2.3% so far in 2018, while the S & P 500 index

SPX, + 1.55%

is set for a 6.2% climb.

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In June, one of the most convinced and most vocal proponents of bitcoins, Tom Lee of Fundstrat Global Advisors, reiterated a prediction that the asset would have closed the year around $ 25,000 during an interview with Bloomberg (paywall). Llew Claasen of the Bitcoin Foundation in February said bitcoin would hit $ 40,000 by the end of this year, in an interview with Business Insider (paywall).

However, the current gloomy digital asset trading action makes such predictions high for a record-breaking goal of over $ 20,000 and beyond questionable, if not unlikely.

"I can not base my analysis on anything other than the technicians and at this moment the rankings seem very bearish, so at present, I have no reason to expect bitcoin to go back to those crazy levels," he told MarketWatch Fawad Razaqzada, technical analyst at Forex.com at the end of June.

Robert Sluymer, technical strategist at Fundstrat Global Advisors and a colleague of Lee agrees with Razaqzada, during an interview at the end of June.

"You have what's happening and what could happen and I think if you're using techniques [analysis]"And you must be very honest about what is happening-then we have a recession in place, "he said.

"From my point of view the price is news and [bitcoin] it needs to show breakthrough evidence to restore bullish calls, "said Sluymer, referring to the violation of good below the levels of about $ 7,000 a few weeks ago.

To make bitcoin reach $ 40,000, an increase of about 590% would be needed over the next six months; for a $ 25,000 milestone, the business should have increased by over 330% by the end of the year.

It's possible? Sure. And it seemed that bitcoin would try a rebound in July – until that run deflated on what some have attributed to the delay in a decision by the Securities and Exchange Commission on a proposed fund traded with bitcoins.

Bitcoin rose by around 240% from the November 2017 minimum to a peak of $ 19,783 in just a few weeks in mid-December, according to the CoinDesk news and research site. In addition, the six-month change for bitcoins from August to December last year represented at least 300% gains, according to the WSJ Market Data Group.

However, critics argue that last year was characterized by blockchain-focused euphoria, distributed register technology that supports virtual and bitcoin-encoded currencies, which attract interest in virtual currencies from Main Street and Wall Street alike, and helping to squeeze the sentiment around the good.

We are advancing rapidly up to this period and the current decline in the value of Bitcoin also comes when there seems to be some ground for further gains. The institutions, some of which had cast a dubious glance at the cryptosides, said they wanted to form trading platforms or invest in blockchain.

Indeed, one of the world's leading investment banks, Goldman Sachs Group

GS, + 2.77%

in May he announced in a New York Times article that he would launch a cryptocurrency trading desk. Meanwhile, regulatory attention in the nascent sector has helped to strengthen its legitimacy, as the Securities and Exchange Commission has repressed particular types of crowdfunding linked to digital currencies, but has promoted an environment that could facilitate bitcoin maturation and alternative bitcoin coins, known as altcoins. Those include Ether

ETHUSD, -0.89%

running on the Ethereum blockchain, XRP coin

XRPUSD, -0.33%

anchored in Ripple and bitcoin Cash

BCHUSD, + 2.72%

To read: SEC could facilitate the creation of exchange-traded funds

In mid-July, Financial News reported that the BlackRock asset management giant

BLK, + 2.92%

which has more than $ 6 trillion, has put together a team to explore potential investments in digital currencies and blockchain.

It is a background that should create a higher track for bitcoins. But is not so. And this is part of the dynamic that has shaken the confidence of those who monitor virtual instruments destined to compete with legal currencies such as the US dollar

DXY, -0.01%

and euros

EURUSD, + 0.0618%

"The recent and dramatic depreciation of Bitcoin against the dollar has challenged the commonly cited purpose of cryptocurrency as a" value reserve "or" digital gold ", said Eiland Glover, CEO of Kowala, an encrypted business focused on virtual currencies designed to be less volatile than bitcoin.

"Rather than a simple dip, this could very well signal the beginning of an existential currency crisis: with investors seriously questioning the advantage of the first bitcoin mover, it seems unlikely that the currency will reach previous forecasts of the currency. high prices at any time, and certainly not this year, "he wrote at the end of June.

To be sure, some of the most avid fans believe that the jump to a new bitcoin record before the end of the year remains a real possibility.

The bull's case is that there is still a wave of investors ready to emerge, which should send higher prices over the course of the year.

Matthew Newton, a market analyst at eToro, an encryption platform, claims that there are still many newcomers, even after the introduction of 2017 to non-professionals.

"In particular, institutions that have great financial power We have seen what can happen with retail investors, what we can see with institutional inflows," he said. "There are trillions in cash [on] deposit in US bank accounts. We're just scratching the surface, "Newton said at the start of this summer.

IQbal Gandham, eToro's chief executive, added that non-scientific surveys conducted by eToro in the UK suggest that few investors who have heard of bitcoin during its mainstream rise in 2017 have actually invested in crypts. "We've had a lot of people talking but few people have walked," Gandham said.

Many crypto-tors share this rosy vision, including the co-founder of Ethereum Charles Hoskinson via Twitter:

The most strident supporters of bitcoin and other altcoins refer to negative news that comes down to the market as FUD, or fear, uncertainty, doubt. Right now, these factors are making a rush to a new high order peak.

And if the bitcoin asset is intended to publish a new four-digit record, it now has less than four months to do so.

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