By Bitcoin (BTC) is the world’s largest cryptocurrency by market capitalization and has seen a huge price growth since it was first listed on exchanges in July 2010. As BTC has experienced multiple bull and bear runs, it’s predicted price for early 2019 has been the subject of much analyses. It is expected that BTC’s price will be influenced by factors beyond that of a normal market and its future direction will likely be heavily impacted by regulatory issues, technological advances and public adoption rates.
Technical Analysis
According to CoinDesk, a technical analysis of BTC’s relationship with the 200-day moving average (200 DMA) and the descending triangle indicates that “the relationship BTC has with traditional charting patterns is occasionally counter-intuitive”. The 200 DMA has established that the market is, at present, firmly bearish. However, it has been cautiously noted that history could prove the opposite and that it is possible that the BTC market could turn bullish by early next year.
CNBC’s cryptotrader, Ran Nuener, agrees with this view and has stated that “based off the previous 1.2 year bear run, it’s possible bitcoin could turn bullish by early next year, especially if all fundamentals are taken into account”. Andrew Macdonald of CryptoBriefing supported this assessment and confirmed that in the short-term the bear market is set to continue, while in the long-term the outlook is more bullish.
A Bearish Sentiment
As BTC and other cryptocurrencies are still in a somewhat grey area of uncertainty with regard to regulation, a major influence on the bearish market sentiment is the pending decision by the US Securities and Exchange Commission (SEC) on BTC electronically traded funds (EFTs). Should the SEC favorably decide on BTC ETFs it will have a huge impact on the price of BTC and will bring substantial funds into the industry. To date, however, the SEC’s decision has not been forthcoming and is now unlikely to be made until the mid-February 2019.
Other factors favor a continued bear market such as Metcalfe’s law projections and the increase in the mining hashrate. The fact that BTC has seen a sharp decline in retail interest in 2018 compared to 2017, with Google searches having fallen around 90% compared to December 2017, also does not bode well for a bull run.
2019’s Bitcoin Bull Run
There is apparently hope for the emergence of a bull market in 2019. BTC’s market dominance, which waned in 2017 as money poured into altcoins and ICO projects, is now returning. With altcoin values stabilizing, and in some cases declining, BTC’s prices continue to rise.
Crypto-specific regulations are set to come into effect next year which will undoubtedly bring clarity to the industry and confidence to the market. Although ETF status may not be achieved by BTC in 2018, regulators cannot ignore BTC ETFs for much longer. The present threat of the SEC banning BTC ETFs is casting a cloud over the industry which we may see lifted in 2019.
BTC is also a vehicle for wealth preservation in countries with a declining currency value such as Turkey, Zimbabwe and Venezuela. According to Macdonald, BTC “is best used for a capital flight where there are restrictions in place from an authoritarian government”. Increased BTC holdings as capital investments may trigger a bull market, especially if countries like China look to BTC to circumvent the declining purchasing power of their currency.
Do you think 2019 will see a shift to a bull market? Or is the bearish sentiment set to continue? Give us your thoughts in the comments below.
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