What awaits the cryptocurrency market in the last weeks of the outgoing 2018? October has come, and, as the chief analyst for ThinkMarkets U.K. Naeem Aslam noted, the current situation resembles the beginning of the 2017 bull market. Even the fact that Bitcoin is struggling to break through resistance levels at $6,800 and $7,000 at the beginning of October while keeping the support line at $6,000 is very similar to what it was 12 months ago. Then, Bitcoin cost a little more than $3,000, and in the end, soared to a level of $20,085 on December 17.
The "Bottom" of the Market Fell on September 13
Mike Novogratz’ assessment was correct as on September 13, he announced that the market had reached its lowest point, citing data from the Bloomberg Galaxy Crypto indicator. Indeed, after that, we observed a noticeable increase in a number of altcoins: Bitcoin Cash jumped 20 percent in just one day (September 27), when, based on the published 438-page Bitmain report, it became clear that the company, which is a notable investor in this cryptocurrency, demonstrates excellent financial performance. XRP, in its monthly rise in price by 70 percent even occasionally overtook Ethereum in the second half of September, coming in second in terms of capitalization. Bitcoin Gold (up 23 percent) came out green, and Stellar Lumens and Dogecoin each showed a 15 percent growth, while Tezos added almost nine percent.
Technical Analysis: The Bull Market Begins
Technical analysis really shows that all those cryptocurrencies that have not yet become more expensive are like a tiger preparing for the jump. The Williams %R oscillator reinforces the belief that if Bitcoin approaches $6,000, the market situation will indicate anomalous oversoldness of this asset. It is no coincidence that the twenty-day weighted average price of Bitcoin is at the level of $6,630. The fact that growth is inevitable is also indicated by the Bill Williams oscillator (similar in functionality to the MACD), the stochastic oscillator, the Klinger volume oscillator, the technical accumulation/distribution indicator, and Chaikin Money Flow. This is also confirmed by the analysis of the trend lines RIG.
The head of Binance, Changpeng Zhao, is confident that the cryptocurrency market can start a rapid growth “at any moment.” By stating that there is no bear market at all, he is right. In the last months of 2017, Bitcoin was also slowly taxiing for takeoff. It fell by 14 percent by September 17, rose by 20 percent by October 1, and then went steadily up: October 15 (up 50 percent), November 5 (up 100 percent) and December 10 (up 400 percent).
In addition, as Nigel Green, head of deVere Group, notes, the recognition of the fact that cryptocurrency functionalities that transforms our world view will lead to the fact that many investors will be embarrassed by the fear of lost opportunities (FOMO) before the end of the year, and they will acquire cryptocurrencies.
DeCenter presented an overview of the basic predictions of the cryptocurrency market before the end of the year. It is interesting that recently, it turned out that even within the same company like Fundstrat Global Advisors, there are different points of view. For example, analyst Robert Sluymer writes to clients that the recovery of the cryptocurrency market will take a long time. His boss, the head of the organization’s research department Tom Lee, believes that the bull trend is already emerging, and by the end of the year, the market will come to new historical highs. Mark Krems specifies, Bitcoin will rise in price at least up to $50,000 before the onset of 2019. Ran Neu-Ner, a well-known publicist, writes in early October that he is ready for the onset of market growth.
No Market Growth: Whale Logic
But what are we to do if a noticeable rise in the cryptocurrency market does not happen, and by the end of the year, Bitcoin is hardly close to the mark of $10,000, which it had already reached in May of this year? It is worth noting that September gave us a key insight to what we can do, which is to play on the ascents of some crypto coins, catch signals, since growth even by nine percent per month is the profitability that any Wall Street trader will envy.
In addition, the logic of John McAfee, as well as other hodlers, has a foundation. If you take Bitcoin, then the maximum number of coins that can be issued is almost 21 million. If you look at the behavior of some the hodlers, owners of large amounts of Bitcoins, in September, you can find out that they were actively buying Bitcoins in the near vicinity of the $6,000 level, that is, they considered this value as a real “bottom.” The whales did not make transactions at all (in 78 percent of cases), or sold (eight percent), however, those who bought cryptocurrencies (14 percent) did it in the amount of 2.43 times more than those who sold.
To buy crypto coins and not to sell anything is the investment credo of Changpeng Zhao. Why so? There are few assets in the world that are truly limited, and these are Bitcoin and a number of other similar cryptocurrencies, which in this sense follow the postulates set forth by Satoshi Nakamoto. Everything can be potentially dramatically increased in volume, but not Bitcoins.
This circumstance, as well as the fact that along with the existing demand for cryptocurrencies they are distributed as means of payment, plus at the same time a strong investor trend in crypto coins “not to sell them under any circumstances,” create a unique mix of factors for Bitcoin not just to go up in price, but to be in acute shortage in the coming years.
The World Is Preparing to Replace Fiat with Cryptocurrencies
The fact that Bitcoin and other cryptocurrencies will turn out to be in the same demand as means of payment as national money in most countries is also the opinion of the head of the CFTC Christopher Giancarlo: his remark that 2/3 of countries with “weak currencies” will actually replace Fiat with cryptocurrencies can be interpreted as follows. Since the absolute majority of countries in the world do not have monetary units in circulation that have the status of a reserve world currency, most of the world’s economies will switch to cryptocurrencies this is the process to which he devotes a maximum of 10 years. Brendan Blumer, the head of Block.one, which is behind the EOS cryptocurrency project, is also confident that this is a long process. One should not think that these are just excuses: just look at the corporation from the classical investment world, the Fidelity investment fund with a 72-year history, whose leadership also assures everyone that the crypto industry is “in its infancy.” This did not prevent Fidelity from discretely starting to mine Bitcoins, when it cost $180, and to earn billions of dollars.
Escape from a Sinking Titanic
It is important that in the case of political, social or economic cataclysms, the most risky of which could be the Third World War (no matter who starts it for what reasons in this situation), the total collapse of the modern monetary system will most likely begin. In such a situation, cryptocurrencies that “learned” to work in the conditions of phones without an internet connection and even mobile communication (based on P2P technology), as well as on the basis of radio waves, will inevitably become the main tool of financial communication between people, saving them from hunger. It is unlikely that you would pay attention to the cost of the only rescue boat for you if your “Titanic” goes under and it is a matter of your life or death.
Cryptocurrencies Will Never Disappoint, the Main Thing Is to Know Their Advantages
Cryptocurrencies also seem to be an excellent asset for diversifying any investment portfolio, so you should not disregard them. Bitcoin is “tied off” from stable correlation to almost any external indicators of the financial market, which means that it is an asset capable of surviving any global financial crisis, which, as usual, is accompanied by the depreciation of almost all assets.
Cryptocurrencies, even if there is no rally, can be spent or used as charity to help those in need. Considering that free mining means that they are a free gift, in the case of charity and spending them (but not selling), according to the laws of the "gift economy" in one form or another they can go back to their owner, since such actions contribute to their distribution, in contrast to the registration of exclusive rights to cryptocurrency operations and blockchains.
In addition, crypto coins can be provided as a contribution and payment of a share in a cryptocurrency fund, thus it will be possible start forming future pensions without paying attention to how the market behaves for several years. In this regard, the fears associated with their further depreciation look completely illogical. Diar reports that 70 percent of tokens that entered the market through ICOs later fell in price. The magazine Wirtschaftswoche says that investors in such startups in Germany have seen a total reduction in the cost of their tokens by 90 percent. There is nothing fundamentally new in this behavior of tokens compared to securities. When companies enter an IPO, their task is to sell the shares at the highest price possible, using the appropriate media and other support. The fact that after the IPO these papers can be much cheaper is a natural reaction to their frequent overvaluation during their initial placement.
Do Not Sell, Just Buy
Considering the fact that cryptocurrencies are concentrated carriers of new ideas that transform the social and economic reality of humanity, their sale, with the exception of short term speculative operations, looks impractical, both in the case of their appreciation before the end of the year, and in the situation of no rally. Possession of limited crypto coins gives you the feeling that you have a ticket to the future. And even if cryptocurrencies fall in price, it’s better that than to reproach yourself for the rest of your life for not being among those who will shape the contours of a crypto future.