In 2017, anything related to Blockchain and cryptocurrency was hot property; in 2018, anything linked with blockchain is having a difficult time.
Last year, about 170 hedge funds began trading; in 2018 only 20 new funds have started operations so far. Additionally, chances are 10 percent of the existing funds will close operations this year, due to regulatory uncertainty and market conditions.
Even the stock market had joined the frenzy last year when stocks of companies, joining the Blockchain craze, saw their price skyrocket. This year has been the exact opposite, with most of those stocks plunging.
Last year was a race to forecast the higher targets on Bitcoin. There were all kinds of outrageous targets and various justifications for the same. Now, it’s time to give targets on the downside.
A group of Zurich-based researchers has built a model using the Metcalfe’s law, which shows that Bitcoin’s support is in the market capitalization range of $22 to $44 billion, way lower than the current market cap of $118 billion.
As the prices fall, the news and sentiment will get even more bearish. Tops are formed after a buying mania, similarly, bottoms are formed after panic selling. So, let’s keep our buy list ready and start investing when the charts confirm that a bottom is in place.
BTC/USD
In a strong downtrend, the pullbacks only last between 1-3 days. So, after two days of closing in the green, Bitcoin turned down from the $7,711.74 levels
Currently, prices are quoting just above the $7,000 mark, which is an important support. If this level breaks down, a fall to the April 01 lows of $6,757.26 and then to the February 06 lows of $6,075.04 is possible.
We’ll see the first signs of bullishness when the BTC/USD pair breaks out and sustains above the descending channel. We shall look to buy only if the price sustains above $8,000 levels.