Crypto Bear Market Analyst Cautions Investors Against Excessive Bitcoin Optimism for Rising Value
There was a slight improvement for the cryptocurrency markets over the weekend and that sent a glimmer of hope that the industry could be on the verge of recovery and the I-told-you-so critics could become a thing of the past.
Last week it was a bizarre outing for most cryptocurrencies with the biggest one, bitcoin suffering a serious price dip. Bitcoin, as the market was sent into a dangerous dip that indicated fresh regime of the year’s lows for the digital marketplace.
Reports indicate that bitcoin just set a 2018 year record low, trading at just under $3,300 on the aggregated markets. This crash in the market is not unconnected with the hitherto yet to be resolved issues plaguing the crypto world, including low scalability, data insecurity, profiteering, slow transaction speed, among others.
Consequently, the market has continued to experience a threatening crash, with the resultant downward trend in mass adoption expectation. This is even as reports and analysis from last week’s trading showed that the market is bearish, but recovering slightly.
In fact, Bitcoin currently trades nearly 4% over the past 24-hour trading period at its current price of $3,500. This is an improvement compared to what occurred last Friday, with Bitcoin rising to highs of $3,650, but sliding between $3,400 and $3,600 on Tuesday.
However, despite the hope that Bitcoin could fully recover and reclaim its place in full capacity and widen the volume of its first place spot as the biggest trading currency in the crypto market, analysts warn that traders should be cautious.
The analysts insist that it is not over for the Satoshi Nakamoto designed innovation and currencies, insisting that the market crash is still far from being over.
In a chat with MarketWatch on Monday, Stephen Innes who currently serves as Oanda’s head of Asia Pacific trading offered a pessimistic outlook about the current state of the markets.
He claimed that Bitcoin is short of use cases and the persistent lack of these is a big factor contributing to the bear market.
“Bitcoins have gone well beyond the ridiculousness of tulip bulb mania,” Innes said.
“It’s has been a disastrous year for cryptos, 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,” he further explained.
While this kind of pessimistic view has a potential to drive intending investors away from adopting Bitcoin, it does not rule out the fact that the currency is experiencing gradual adoption.
In fact, this increase in market value will obviously drive institutions and investment funds’ interest into Bitcoin and change their perception of the virtual asset.
The increasing recognition of Bitcoin as powerful asset by these institutions and investment groups had recently been predicted by Matt Hougan, the global head of research at Bitwise.
According to him, the decision by major institutional investment groups, such as ICE and Fidelity to invest in it and reputable universities including Yale and Stanford supporting the coin, is a huge signal that many more investors will still see the import of regulated cryptocurrency investment funds.
“…the launch of Fidelity Digital Assets, and the continued movement of institutional investors like Yale University and Stanford University into the crypto space, we have seen significant inbound demand for high-quality bitcoin and ether funds,” Hougan said.
Bitcoin Volatility Drags More Currencies into Lower Drift
It is clear that the instability of the leading cryptocurrency, Bitcoin, will definitely pose a serious threat on the market and trading value of other currencies, including altcoins like XRP, and Ethereum.
As at Tuesday morning, the value of altcoins has dipped by 4%, with XRP trading down nearly 5% at its current price of just over $0.30 –which is just a little above its 2018 record low of approximately $0.24 which occurred in early August.
Ethereum is currently trading with a loss of over 6% at its current price of $91.5 –which is a decent increase from its year to date lowest price of $84.
The hope is that the institutional investment in cryptocurrency could drive interest in Bitcoin. But such interest should not only be driven but also sustained to give Bitcoin the necessary leverage in subsequent years.