Editors Note: This article comes fromBlue Fox Notes (ID: lanhubiji)Editors Note: This article comes from
, author: Richard Godard, from medium, translated by Joey of the Blue Fox Notes public account community, and published by Odaily with authorization.
Foreword: This is a bullish article on cryptocurrencies. As for when the bull market will come, no one knows. As long as projects are being built, as long as the community is growing...there is hope for the crypto industry. It is necessary to control the investment risk within the range that you can bear, and make investment decisions carefully.
secondary title
The bull market is approaching
If you’ve read media articles about cryptocurrencies and blockchain over the past few months, chances are you’ve been pretty pessimistic about the future of cryptocurrencies. For some, criticizing blockchain technology has become a trend. Fortunately, very little of this material is based on serious facts. However, this kind of eye-opening critical content can always make the author quickly become famous and thus obtain some kind of expert status.
Today I want to dispel all pessimistic predictions and give you a realistic view of the current market situation.
What Im trying to say is that Im not going to quote the conclusions of dozens of pseudo-analysts crazily claiming that Bitcoin will reach $200,000 by the end of 2019. In my opinion, the prediction of the future of the market should be based on facts and basic economic laws, rather than purely emotional needs or popular demands.
The current price of Bitcoin is around $3600 (Annotation: This is the price at the time of writing, it is currently around $3900). Yes, this is close to the bottom stage. But what happens next? Plain and simple: a bull market is coming. The reasons why I think Bitcoin will start rising in 2019 are:
1. Bitcoin technical analysis
Lets analyze how the price of Bitcoin has changed over the past few months. The rise in trading volume and the increase in trading positions in December 2018 suggests that the market has bottomed out, which was $3,200 on December 15. Bitcoin price has hit lows and the uptrend has started again. In addition, the trading volume increased significantly, leading to increased volatility. These factors may lead to a large number of buyers/investors entering the space. This, in turn, leads to an increase in the price of Bitcoin.
In addition, on the daily chart, we can also see the typical false breakout pattern, which is a typical signal that the market will go up.
Of course, rational investors should not make their own assumptions based entirely on technical analysis. It should consider the fundamentals of the overall economic situation, the technical potential behind the asset, and many other factors that need to be analyzed together. Lets move on to the next point.
2. Historical examples
A groundbreaking new technology popped up out of the blue. Unfortunately, in the beginning, its full potential only had a noticeable impact on a small tech nerd community, and it was entirely supported by these people in the beginning.
Then, gradually it became more and more popular. Companies and entrepreneurs are starting to focus on the opportunities presented by this technology. More and more people are starting to invest. At some point, interest in the technology has reached a critical mass. The mass media started covering it all day long and everyone was interested. Any company that pays attention to this technology in some way starts to attract a lot of investor money. Even having a specific technical term in a company name is enough to create buzz and increase the companys value.
It goes in that direction to a certain point, and then, it looks like the story is over. The hype is over. The bubble burst. The prices of all assets related to this technology are reduced to a minimum.
Familiar? Yes, Im talking about the dot-com bubble. Its story is very similar to what is happening with cryptocurrencies today. But did the Internet end with the end of the dot-coms?
Absolutely not. Also, as we are seeing now, quite a few of the top internet companies that were founded before the dot-com bust did drop in value after the dot-com bust, only to rise in value with a vengeance after the bubble burst up. Amazon is the best of them all!
During the dot-com bubble, Amazon was one of the leading companies. Its value increased along with other similar companies in the late 1990s, and its price also fell sharply after the dot-com bubble burst. Fortunately, it didnt kill the company. The potential behind the online retailer remains high, and weve been following the company for significant growth in value since 2008.
The same thing is likely to happen to Bitcoin and other top cryptocurrencies. Bitcoin price is still low at the moment, but it will come back strongly. Yes, Bitcoin was overvalued last year, what we had in December 2017 was indeed a market bubble. But that doesnt mean those assets are no longer valuable.
Selling Bitcoin now is like selling Amazon stock after the dot-com bubble burst in 2000. Im sure you dont want to regret doing something like that.
3. Developments in the field of cryptocurrencies
It is clear that blockchain technology is far from reaching its full development stage at the moment.
Cryptocurrency infrastructure has been built over the past few years. Now, we have many valid and reliable cryptocurrency exchanges, cryptocurrency wallets and mining pools. At the same time, the existing infrastructure has not stopped developing.
Many good ideas that were proposed before are now being implemented, such as cryptocurrency loans or bitcoin futures. The Bitcoin protocol itself is also evolving towards perfection through Bitcoin forks and implementations such as Segregated Witness (SegWit).
Needless to say, cryptocurrencies are not the only possible application of blockchain technology. Many new projects attempting different adaptations of blockchain technology have been in development for the past two years and are now operational.
Therefore, this field still has high development prospects. Take a look at current crypto industry services and companies: exchanges, wallets, projects. Theyre still developing, putting more and more money into this space. Just look at banks and governments, which are developing blockchain-based legal and banking systems. Do you trust these guys to invest in something that has no future? Use these guys with pockets full of money as role models for your cryptocurrency investing career.
Another good thing that has happened in the past few years is that the market will be purified and those scam projects or projects that are not competitive will go out. With every new, competitive field, this natural selection is a necessary step forward, so enter 2019 stronger than ever in the cryptocurrency market. Isnt that a good sign?
4. Markets Stabilize, Mass Hysteria Ends
The hype in the second half of 2017 and the first half of 2018 was actually not an entirely positive phenomenon for the cryptocurrency space. Of course, it has caught the attention of hundreds of millions of people, and its definitely a good thing that cryptocurrency has become a valuable asset rather than the small experimental role it had previously played.
But on top of that, it has fueled a hype in the cryptocurrency space with millions of people following the hype, hoping to get rich doing nothing. This mass hysteria has somewhat degraded the image of cryptocurrencies, making them an object of serious criticism. Many skeptics have therefore criticized blockchain and cryptocurrency technology, claiming that it is more of a hype than a truly groundbreaking technology.
So it’s a good thing that the cryptocurrency space is gradually getting rid of people who do nothing and don’t even have basic economic or investment knowledge. Now I really want to believe that the future development of the cryptocurrency market is not because of hype, but because it creates real value. This field needs serious investors who are used to independent thinking, which is also necessary for the development of the encryption field. They dont follow the herd, but base their decisions on facts and analysis. This leads to the next point:
5. Big investors are on the way
Suppose the price of bitcoin falls again and you sell your asset at this moment. This may be the best and most obvious decision for you.
So, who do you think is on the other side of your trade? Why are they accumulating thousands of bitcoins and ETH in their accounts? Trust me, its not just because they are happy to help you make your investment profitable security. It has intrinsic reasons.
An interesting fact is that when the price of some assets falls, small investors usually sell out of fear of mounting losses. Conversely, large institutions such as banks and hedge funds tend to buy these assets at low prices when everyone else is selling them.
It goes without saying that when asset prices rise again, big institutions make really big profits. As large companies with strong risk management systems, they can afford the risk of holding large amounts of highly volatile assets.
Although we haven’t seen a lot of official information about large investors entering the space, the volatility of the cryptocurrency market over the past two years has shown that some large players have begun to operate anonymously, using different cryptocurrencies to conduct large-scale transactions. These actions heavily affect the price of cryptocurrencies, making them go up and down, which we can see on cryptocurrency charts. This is a typical approach taken by large investors before entering a new market: they first test the market and only make an official entry when their needs are met.
This strategy is especially applicable in the cryptocurrency space. Unfortunately, cryptocurrencies are still plagued by plenty of rumors and misunderstandings. Any large investment institution entering this space is likely to face misunderstandings from the financial community. Therefore, until the cryptocurrency market becomes more stable and widely recognized, it will remain the norm for large investment firms to act anonymously through third parties.
