Halfway through January 2019, Bitcoin (BTC) still experiences high volatility, with downward spirals being more often than brief periods of recovery.
After two crashes in 2018’s bear market, many were hoping for a positive shift in the largest digital currency’s behavior. While the market did show signs of potential recovery in the first several days of the year, recent development indicates that the bearish grip on the market has yet to loosen.
On January 10th, Bitcoin’s value was just above $4,000 per coin, only to start crashing once again. In a matter of days, it dropped down to $3,552 on January 14th, which was its lowest point so far in 2019. After the drop, BTC started growing again, and it currently trades in the green, with the majority of altcoins following its lead.
At the time of writing, Bitcoin’s price sits at $3,686.31, after a 2.79% increase in the last 24 hours. Meanwhile, its market cap ($64.4 billion) is only slightly above half of the total market cap, which is currently at $122.5 billion.
Bitcoin searching for a bottom
Bitcoin has had a tough year, and after two market crashes followed by multiple downward spirals, it is not surprising that the coin is struggling to find some sort of stability. It seemingly achieved it in late December 2018, although the current situation shows that the bottom has yet to be seen.
For now, it is believed that the major supports sit at around $3,247, $2,765, and $1,956, while the biggest resistance levels that BTC has to breach remain at $3,679, $4,249, and $4,715. So far, most BTC-related discussions revolve around the bottom — whether BTC has found it already, or if the worst has yet to come?
Some analysts have recently claimed that Bitcoin is following a specific pattern, one which has its own ups and downs in an endless cycle that represents the life of the coin. However, the cycle is often interrupted by various events around the world that tend to impact investors’ behavior. According to this theory, Bitcoin is approaching the end of the negative part of the cycle, and will likely start rising relatively soon.
The exact period when this might happen cannot be properly determined, but one thing to note is that the negative part of the cycle has yet to reach the lowest point. This has inspired a belief that BTC might continue to drop, maybe even below its current bottom of $3,200. In fact, some predictions claim that the price of $2,500 remains a realistic possibility. Several technical analysts have already speculated that such a drop is possible, such as Josh Olszewicz, (also known as “BrotoshiMoku”) who predicted it back in mid-December.
Numerous projects and events that were expected to help boost the coin’s price before the beginning of the positive part of the cycle — such as the approval of Bitcoin ETFs and the launch of Bakkt Bitcoin Futures exchange — have already been postponed several times. Now, as the latest dates of these events are approaching, the US government shutdown makes it impossible for the regulators to make a decision.
Because of this, the Bakkt exchange will likely see yet another delay, while the future of Bitcoin ETFs is still a matter of debate. Some believe that the application may be approved by default, due to current laws. Others believe that the US SEC will reje
The lack of regulations also continue to torment the crypto market, including Bitcoin, and any attempts to provide a functional regulatory framework will get significantly delayed due to the same issues regarding the US government.
All of these problems are impacting the crypto world and Bitcoin in particular. However, investors remain optimistic, and Bitcoin’s daily trading volume remains at around $5.6 billion. Even so, it is commonly believed that the coin will not be able to find stability until proper regulations are applied, while another delay of events which may result in institutions approaching the crypto market might cause another downward spiral on their own.
In any event, Bitcoin’s future remains uncertain. While the legal issues are preventing it from stabilizing, negative news and lack of certainty prevent it from growing. The only way that the coin can continue to move is down, which is what it has been experiencing in the last several days. Wherever the coin may end up, analysts still predict a positive trend in the near future. However, the real question is — how far down will Bitcoin go before the next rally strikes?