The year of 2018 has been a wild ride for crypto so far. January 2018 kicked off the new year with Bitcoin trading around $17,000. This was following Bitcoin reaching all time highs around $19,500 towards the end of 2017. As the year progressed, we saw massive selloffs in the crypto space. There was many different factors fueling the selloffs in our opinion. One of the bigger issues was the SEC and the statement they put out to the market. Back in March the SEC issued warnings about various exchanges and how they were highly unregulated. Their feedback was that these exchanges are not registered with the SEC posing threats to investors. The SEC has said numerous times that some of these cryptos classify as "securities" which would mean they need to be regulated. In our opinion, it will be extremely hard for the SEC to push this policy though based on how crypto such as Bitcoin is structured. There was a massive outflow of funds during this time showing spook in the market. Not to mention you had platforms like Facebook/Google banning crypto advertisements.
The picture above represents prices from early January 2018. You can see Bitcoin was around $17K prior to any catalyst taking place. As time progressed Bitcoin fell to 6K arena, representing very sharp market cap declines. As we have mentioned numerous times, we saw the selloff very overhyped and unnecessary.... We still believe the sell off was accelerated by retail investors that were buying Bitcoin at the peak.
As the year progressed we saw the sharp decline with Bitcoin around 6.9K as of March 18th. These levels seemed to be solid support levels that were attracting investors. After digesting all the news within the market, none of it seemed significant long term in our opinion. We saw it as short term drama that would trigger profit takers and opportunities for others to "buy the dip". Going back to the social media outlets banning ads, we actually saw this as a strong movement in the crypto space. We believe it will actually make crypto stronger in the long term. With the ICO community drastically growing, many useless ones were using outlets like social media to "pump" their coin in our opinion. Limiting advertisements will wash out the irrelevant ICO's and establish more focus on the stable cryptos. Despite the market selling off to this movement by social media outlets and Google, we actually saw it as a bullish indicator to create more trust looking forward.
For the last few weeks, crypto overall has been on a tear. It seems as if the market flushed out naysayers the last few months, who don't truly believe in the movement. Demand seems to be pouring in again as Bitcoin approaches 10K. With Bitcoin being the "index" of cryptocurrency, many other alt-coins have shown strong upward momentum as well.
As we enter the month of May, we see it as a crucial time for Bitcoin. As Bitcoin approaches 10K, it will be interesting to see how it reacts. We think Bitcoin will break through 10K levels and head towards 15K levels. IF this is the case, the sky could potentially be the limit. With Bitcoin correcting from 6K levels back to 15K, it would signal a lot of demand to the movement. We believe a correction to that magnitude would also spark many financial news outlets covering it. Bitcoin has historically corrected itself very well. Many thought the decline from 20K to 10K was the beginning of a "bubble burst". IF we instead see another correction to 15K levels it will be very interesting. At that point, we think many may start to second guess their "bubble" thesis, and instead focus on the demand pouring into Blockchain. We still have a price target of $30,000 on Bitcoin end of year. Time will tell if this can come to fruition.
Opmerkingen