Bitcoin Price Fails to Follow its Year-on-Year TrendJuly 7, 2018
The history is not repeating itself when it comes to bitcoin. The world’s largest cryptocurrency did not move according to the previous years’ trajectory for the 2018 Q2. The same three-month period closed this week and the numbers show that the price was down by eight percent. This ended a 7-year streak for the cryptocurrency.
Before this year, the same digital currency managed to provide a good showing in the Q2 period. In 2011, the Q2 rally took BTC up by 1,964 percent. Now, the bulls were eyeing a chance for the price to rally in the same manner. This comes after a 50 percent drop that took place in Q1.
The bearish outlook was strongest in April when the analysts noted the feared death cross – the moment when a crossover occurs between a 50-day moving average and the moving average of the previous 200 days. Somewhere forecasting a drop to the level of $2,800 which has not been seen since September 2017.
But, the lagging indicator kept the bears on the upside of the market. The bulls gained some additional tractions with the news that Rockefeller and Soros, along with their enterprises, are entering the crypto domain. This is why in April the hopes were high for a recovery to the 10k price range.
May ends Bull Optimism
The BTC price has breached its long-lasting falling trendline in April. The bulls took this, among other things, as a sign that the break over $10,000 is about to occur. But, this never materialized. Instead, the path of least resistance was leading the price downwards and the bears did not fail to notice the same.
The cryptocurrency ended the same period with a loss of 19 percent. The recovery never came in May. During June, the cryptocurrency remained on the defensive. The long-term technical indicators showed mostly bearish territory and bearish crossover that came for the first time since 2014.
At the same time, BTC found its stability below the 50-week moving average. The price of BTC fell below $6,000 for the first time since November 2017. The charts point that the current price of around $6,500 will test $5,000 range in the current quarter. The news continues to pile onto the bearish outlook towards the cryptocurrency.
The Q3 Possibilities
The 75-week MA study is showing some positive potential among all of the negative outlooks. The history shows that the make or break level is the moving average. The previous BTC bear market ended when 75-week EMA hit at the end of 2015.
This led to a 24-month long bull market, which is the same thing that catapulted the cryptocurrency to its height of popularity. This is why there are reasons to be cautiously optimistic but still hesitant about the prospect of the bull market retaking the reins anytime soon.
The longtime descending trendline is still valid and only a break above its level would signal a clear turn towards a bearish-to-bullish market. At the same time, there are plenty of those who believe that the chance of that happening in Q3 is high.
Rejecting the Bubble Narrative
One of the key hurdles in any recovery bitcoin had previously and will have in the future is the persistent notion that the whole ecosystem is a bubble. Analysts and pundits usually quote the circumstance that brought about the bursting of the dot-com bubble or the Dutch tulip mania from the early Renaissance.
But, the awareness of this issue is slowly making headway. Analysts that are working under the Bernstein brand have compiled a report where they outline that the cryptocurrency system is actually a developing alternative to Wall Street. According to them, the community of the blockchain industry is setting up a thing they are calling “a parallel financial network” that is an alternative to the current systems.
The analysts considered that the platforms created with this approach still exist only on the fringes of the mainstream system and the global economy. But, they also noted that the size, scale, and relevance are constantly growing. This is the reason why the mainstream talent, followed then by capital, is being diverted towards the same field.
The report points out that the development is creating a huge “market-based innovation experiment”. It has its issues, including token sale scams and many other forms of crypto fraud, some of which is ancient in its mechanisms, while others are very novel and tapped into the very nature of the blockchain tech.
At the same time, the markets of crypto, which never close, are acting as a sort of a natural correction system. This feature of the crypto market is one that could potentially be the biggest asset of an always changing and developing global financial market.
A Changing Landscape
Officially, the crypto market has its huge hurdles like the mentioned scams in the fundraising domain and the increasing threat or regulation that is unclear in both scope and depth. But, the markets are working 25 hours a day, seven days a week and are natural correction systems.
Like eSports and other novel phenomena, this market is rigged for the modern world. These markets regularly fall down hard on bad actors and are unlike anything from the dot-com bubble where a weak business model ecosystem began crashing down.
The crypto market, according to the analysts, is able to build and destroy fortunes on a daily basis. Interestingly, the reports also entered in the wider perception of individual cryptocurrencies, especially bitcoin. For it, the Bernstein analysts stated that BTC nodded no more detractors and critiques. The system has plenty of these and they appear to have strengthened the network, not weaken it.
At the same time, this non-government, non-centralized network is able to facilitate transfers and final settlements within 60 minutes. The costs for the same transfers are between 0.5 and 0.1 percent and no bank in the world or a financial network can do the same. The reports also singled out ethereum and its ERC-20 token as the killer app of the future crypto fintech network.
Because of reports like this, which are more than objective and are coming outside of the crypto community, there is no need to doubt that the bitcoin network has that potential for a bull outbreak.