Bitcoin Tested $13,000. Retrospective And Forecasts

June was an extremely positive month for the first cryptocurrency. A psychological barrier of $10,000 has been reached and many crypto enthusiasts immediately rushed to give their comments about what to expect from bitcoin in the foreseeable future. It is quite logical, and already familiar, that in such an atmosphere a to-the-moon chorus was formed, which trumpeted about the first cryptocurrency to grow rapidly “to heavenly heights.” The old friends of the crypto market like Tom LEE, Tyler WINKLEVOSS, Michael NOVOGRATZ and many others rushed with their comments. Oh yes, the market gave a lot of reasons for every modern prophet to practice in raising the stakes and the frenzy of predictions, expressing theories.

Well, joyful expectations began to come true — Bitcoin continued to grow. According to CoinMarketCap, for the week from June 21 to June 27, the growth of BTC capitalization was more than 37%, and its share of the total cryptocurrency market reached 62%. In the TOP-10 of cryptos, only Ethereum and Bitcoin Cash joined this rally.

Events of the last several days:

• From Saturday, June 22, till Monday, June 24 Bitcoin constantly tests and eventually surpasses $11,000.
• Tuesday, June 25th. Analysts report an unprecedented volume of trading in derivatives on the Bitfinex exchange.
• Wednesday, June 26th. Bitfinex is again in the news: the liquidation of "shorts" in the amount of 142 million dollars spotted. The exchange goes to the planned technical work, users panic. Against this background, Bitcoin was seen at $13,000 and almost reached 14,000. It was this threshold that served as a point of massive sales.
• Thursday, June 27th. Another exchange goes offline, this time Coinbase. After that, the price of BTC drops sharply by $1,700. Bitcoin corrects, the price is stable at $12,300.

The graph below shows the volatility of the first cryptocurrency for the last day.

What's next?

According to some analysts, the price surge could have been triggered by the several consecutive large orders on three exchanges in an aggregate volume of up to $100 mln. There is an opinion that Chinese investors came to the market again: the Chinese state news agency Xinhua reported that Bitcoin can be a good hedge against risks in a trade war with the United States. The news could have served as a signal to a “thaw” and a change in the rhetoric of the Chinese government in relation to cryptocurrency.

Meanwhile, the market is full of utopian forecasts and statements. For example, John MACAFEE is in his repertoire and said that altcoins would grow dozens of times, and the CEO of the Kraken exchange, Jesse POWELL, tweeted that he was waiting for a bitcoin correction to reach $100,000, or maybe a million. We have tried to bring more down-to-earth forecasts from various sources in the cryptocurrency market about what might happen in the near future.

Herbert SIM, Head of Business Development, Broctagon:

"We've recently seen perfect market conditions for a rally, and it shows no sign of stopping. The recent Facebook Libra announcement, as well as the heightened demand for CME crypto futures, show that large institutions are realising the opportunity cost of not being involved in crypto, and dragging the market up with them. Conditions are also perfect for any nervous retail investors considering dipping their toes back into crypto investing. [...] If this trajectory continues, then 2019 could be a record-breaking year for Bitcoin."

Gavin SMITH, CEO, Panxora:

“The factors behind the Bitcoin price rise are unlike any that we’ve previously seen in the industry. This is largely driven by a change in investor profile. Now that Bitcoin is being adopted by more and more mainstream institutions, its price is naturally driven by more conventional factors. We are currently seeing a move towards all risk assets, with both gold and US stocks moving higher. This is due to the perception that the global central banks are entering an easing phase. While this has benefitted all risk assets, the combination of increased institutional involvement and easier credit prompting a move into risk assets means that Bitcoin is getting a double whammy.”

Alex KRUGER, a well-known economist and trader, argues that the reason for the popularity of Bitcoin is quite simple: in fact, demand exceeds supply:

“The cause is simple: aggressive buyers crossed the bid-ask spread and overpowered both passive and aggressive sellers. Based on price action, there were aggressive buyers with deep pockets in action last night. There was no specific trigger known to anyone outside of them. There has been a myriad of extremely bullish factors in place as of late, which include new trading venues => parties front-running Fidelity/Bakkt/Ameritrade/E-Trade/LedgerX flows; Libra
and various macro narratives.”

In general, the forecasts remain positive and the bull market has chances for further development, and about that Bitnewstoday will continue to inform you.

Image courtesy of Tridex