Bitcoin: The Battle for $10,000

Analyst Mikhail Mashchenko speaks about whether there is any hope for an increase of the main cryptocurrency’s exchange rate in the near future.

Despite the mixed information background, the past week proved positive for the cryptocurrency market. Bitcoin reached a mark above $10,000, and Ether inched above $800.

A new drama is unfolding on the internet as the participants of the market are unveiling another conspiracy based on "fictive" volumes, prices, and even the number of coins they have obtained on some resources.

In general, the story is reminiscent of the all too familiar forex cuisines that "draw up" arbitrary, random numbers that are beneficial to them. According to the calculations of the speculators, about 93% of the volume on the OKEX platform’s website is simply invented.

At the same time, Goldman Sachs is making a statement that seemed impossible only a couple of years ago: "We came to the conclusion that Bitcoin is not a hoax,” and soon the leading investment bank will launch the "settlement forward" as its version of the futures option. Of course, there is no mention of direct participation in trading, but the difference is clear from when Bitcoin was basically considered a settlement for the purchase of weapons and drugs in the Darknet is palpable.

Warren Buffet, however, criticized cryptocurrencies as per his tradition at the annual meeting of his fund, predicting a dire end to them after the digital euphoria subsides. Charlie Munger, vice president of the company, expressed figuratively by saying "If someone starts selling excrement, would you be afraid to stay off the bandwagon and miss their growth?"

Apparently, it is too early to talk about the massive recognition of cryptocurrency by institutional investors, even despite rumors that large funds are interested in crypto assets and are waiting for the moment to enter a position. And the appearance of 10,000 "physical" Bitcoins with denominations of 0.01 and 0.05 BTC from a Singapore startup is unlikely to improve the situation.

In general, despite the positive expectations in the long term, it is difficult to predict the growth of exchange rates in the near future. Although the cryptocurrency market is recovering, there has been no significant growth in interest to it as the number of search queries in Google remains significantly lower than the winter figures, and the increase in new wallets lags behind last year's figures.

In the last article, we talked about the seasonal nature of the market, the natural drop in rates at the beginning of the year and a new sharp rise in June or July, as well as the return of "risk on" to the market. In short, if there are positive shifts in demand, transaction growth, and the number of new wallets, then 2018 will not be an exception.

The breakthrough of the 200-day moving average (MA) will be critical for Bitcoin. If we analyze the movement of rates in the past, we note that after every serious deviation of the rates from the MA, a pullback took place over the middle line, followed by a prolonged consolidation, until the average approached current prices, followed by its penetration and new growth. It was so in the past, and most likely, it will happen again. The only difference is that the "rally" in 2017 took a lot longer, and rates experienced parabolic growth as at the beginning of the year the gap between the indicators was 63%, and in December, the difference was as high as 260%.