In the last 10 months of 2018, digital prices have fallen dramatically and interest in the blockchain industry has dropped. Recently, many coins began to grow again. Will there be a new wave of growth in December?
In the first week of November, the value of the digital money market increased by 8% to USD 220 billion, Bitcoin again rose above USD 6,500, Ethereum increased by 10%, XRP by 22%, and Bitcoin Cash by 54%. The first crypto-currency is sold at the same level as last year, before the most famous rally, as a result of which assets set the historic maximum value of 20 thousand dollars.
However, the situation in the industry is different now: digital money was at the peak of popularity, more and more people were learning about it, the governments of large countries began to realize that the industry had to be regulated, and China and South Korea had already introduced bans on cryptocurrencies. Now, in the opposite situation, people realized that it is not easy to make money on a new type of asset, it is much easier to lose money.
In December 2017, the catalyst for the sharp increase in the value of digital assets was the introduction of futures contracts for bitcoins through the Chicago Stock Exchange CME and CBOE, which probably later influenced such a long and prolonged correction. This opinion was expressed by some well-known experts, for example Tom Lee, Principal Analyst of Fundstrat, spoke about it many times.
Experts also call the reason for the significant increase in the cost of cryptocurrencies FOMO – the syndrome of lost profits, when assets are bought for fear of lack of time to earn money on the rate increase. This was due to the constantly growing popularity of cryptocurrencies, in particular Bitcoin. The network contained many stories from users who successfully invested in digital money and now rest on their own island or drive Lamborghini.
This year, these stories replaced investors' court cases against Ripple, whose XRP token fell dozens of times, and many stories about how wealthy merchants can no longer pay high taxes. The mood has changed, the volume of trading on large cryptoclosure exchanges are getting lower and lower, and the variability of bitcoins has dropped so much that now the coin is not interesting for investors who plan to get rich on fluctuations in its value.
At the moment there are no fundamental news that could lead to a new rally, just like last year, believes Anton Efimenko, CEO and founder of Market Maker Technology. He stressed that the current situation in the industry is so large that it is too early to talk about the long-term growth in the value of digital resources.
"In general, the market, like Bitcoin, goes smoothly and it is too early to talk about development. It is also worth taking into account the background of the news, for example Goldman Sachs introduced Bitcoin derivatives and Fidelity Investments invested in Binance and Seed CX: There is no fundamental impulse for the increase in cryptocurrency, and everyone is waiting for the launch of Bitcoin-ETF, I think it will be the strongest impulse, though temporary, "Efimenko is sure.
Nikita Zuborev, senior analyst at BestChange.ru, agreed with him. The expert claims that despite the increase in cryptocurrency prices at the beginning of November, one should not react too sharply.
"On the positive news of the cryptocurrency market, it is worth noting that bitcoin futures (on CBOE) in October reached a record low level of volatility (around 6%). Against the background of the growing volatility of the traditional market, due to a correction that the constantly growing market has not seen since for a long time, a significant increase in interest in cryptocurrency assets from institutional investors is possible, "said Zuborev.
He emphasized that the growing costs of the largest digitized assets as a result of capitalization are special cases that coincided with time. For example, the growth of Bitcoin Cash explains the upcoming difficult forks on November 15.
Against the background of the announcement of the "division" of the network and support for updating the largest stock exchanges (Poloniex, Binance, OKEx and Coinbase), the daily volume of Bitcoin forks increased fourfold during the day, the expert reminded. Most investors are likely to increase Bitcoin Cash in their portfolios to get the right number of new coins from the Bitcoin SV and Bitcoin ABC development teams after the upgrade.
Zuborev also explained the increase in the cost of the XRP token. This is due to many positive news: the launch plans are aimed at full entry to the Asian and Middle East markets. Over 200 companies are already participating in the RippleNet program, the blockchain project is constantly growing and gaining momentum. According to numerous analysts' opinions, the XRP token is currently the most promising altcoin on the market, said the expert.
"The synergy of this positive news has changed the upward trend, but we should not expect a repetition from December 2017. We recommend moderate optimism in the cryptocurrency market to private advisers. Most likely today's growth may continue until the end of the year with periodic local adjustments," Zuborev suggested.
He recommended that we should not forget about the risks that investors and traders can expect in early 2019. A large number of investors from Asian countries celebrate the Spring Festival (this is the "Chinese New Year"), which is accompanied each time by a difficult correction on the cryptocurrency market.
Senior analyst Alpari Roman Tkachuk said that on one of the largest Bitfinex exchanges, the number of short positions on bitcoins dropped to a minimum of two months, while the number of long positions is growing. At the same time, the volume of trade is also growing, which is a sign of growing interest in the first crypto-currency and may be a harbinger of value growth.
"In our opinion, by the end of the year, the price of bitcoin could increase to USD 7,000, and fundamental reasons are needed to achieve more significant growth, for example by allowing ETF to Bitcoin to register by the US Securities and Exchange Commission (SEC)," said Tkachuk.
Experts do not believe that the cost of bitcoin can again rise sharply at the end of 2018, Like last year. However, many experts expect an increase in the cryptocurrency rate in 2019. When institutional investors appear in the industry, they will become more developed and regulated.