Bitcoin’s bearish conditions are far from over, analysts claim.
At the time of writing, bitcoin is trading for just over $3,300. This is about $300 less than where it stood 24 hours ago, and the lowest it’s been in approximately 15 months. While virtually anything can change at a moment’s notice in the crypto space, bitcoin isn’t quite ready to pull itself out of the hole.
Stephen Innes – head of Asia Pacific trading at Oanda – says that bitcoin has yet to provide any significant use cases, and thus the bear market is far from over. He comments:
“Bitcoin has gone well beyond the ridiculousness of tulip bulb mania. It has been a disastrous year for crypto, and by all indication, the current bear market could go from bad to worse with no fundamental or underlying reasons to buy BTC even more so when the only support offered up is a squiggly line on an analyst chart.”
Investor Bobby Lee – who co-founded the Hong Kong-based bitcoin exchange BTCC – recently commented on where bitcoin could go given it repeats its previous history. He says that bitcoin could potentially fall by another $1,000 or more before any serious recovery is witnessed:
“If history repeats perfectly, then the currency bear market for bitcoin would bottom out at $2,500 next month in January 2019, and then the next rally would start in late 2020, peak out in December 2021 at $333,000, and then crash back down to $41,000 in January of 2023.”
Bitcoin likely fell this year for many reasons, the biggest one being its volatility (what a surprise). While bitcoin and cryptocurrencies in general are known for their volatile natures and price swings, nothing could have prepared bitcoin investors for the drops that occurred this year. To fall from $19,000+ to about $3,300 at press time is quite a loss, and despite recent reports that bitcoin had seemingly reached its lowest level of volatility in years, evidence suggests otherwise.
In addition, bitcoin has undergone a strong period of evolution in which it is no longer just seen as a method of payment or standard investment unit. The long road towards a bitcoin-based exchange-traded fund (ETF) for example, has likely opened and closed several doors over the past few months. Usually, large-scale changes like this take time and alter the asset in question to the point that it’s virtually unrecognizable, which to an extent, has occurred with bitcoin.
SEC ETF Decision Delayed
The Securities and Exchange Commission (SEC) has not followed through when it comes to making a valid decision regarding the ETF submitted by VanEck SolidX, which some say still has the best chance when it comes to garnering approval. After several delays, the SEC had finally settled on late December to make its decision on the ETF, though that decision has once again been postponed. Enthusiasts can now look to February 2019 regarding the SEC’s decision, and even then, who’s to say it won’t be postponed one more time? Heck, the streak has lasted this long… Why break it now?
Read: What is a Bitcoin ETF?
Some generally believe that cryptocurrency is still in a “wild west” phase, and thus requires a lot more work before it becomes valid enough to earn the attention and spotlight it deserves.
Light at the End of the Tunnel
However, not everyone is looking at the situation through a negative lens. Herbert Sim – chief commercial officer of the cryptocurrency exchange Cryptology – says he doesn’t believe crypto is disappearing anytime soon, and is beginning to garner the notice of government bodies as a valid part of the financial system:
“Institutions and governments alike are beginning to accept that cryptocurrencies are likely to become an integral part of the financial system. Regardless of price moves, it’s clear that the cryptocurrency community is here to stay, with institutions offering new modes of trading such as options, futures and trading on margins.”