We’re at the end of the week with the price of Bitcoin still over $1,000, albeit very close to breaking that bottom line. After a month of setting records, a series of negative events has brought the cryptocurrency down, yet not as low as previous events have done. Thus, it seems that support is going strong as Bitcoin still keeps away from any massive rollbacks like before. But how long will it stay this way if these hard times continue remains to be seen.
At the same time, there’s another virtual currency camp forming, apart from the one supporting Bitcoin Unlimited. Namely, there have been plenty of talks about the Ethereum project, which is setting out to become Bitcoin’s “legit” counterpart and follower.
Based on Bitcoin’s blockchain, this digital currency uses smart contracts which are said to allow automated management of any corporate process, as they are able to interact with others, keep records, make decisions for you, and send payments automatically. This flexibility has already grabbed the attention of big players like John Hancock Financial, Airbus SE, and Even Microsoft, yet it is unlikely to be able to replace Bitcoins.
Bitcoin Still Struggling
Just like we talked about in our last update, Bitcoin tried testing the $1,050 range to find support, but seller pressure kept the price down. The lowest point was observed this early morning, when the price dropped to $1,008.18, while the highest point of $1,060.60 was hit yesterday afternoon. Trading volume has likewise dropped since Wednesday and is now at $268,666,000, while the market cap is at $16.5 billion.
Our technical analysis shows that long-terms signals are heavily pro-sell, with all 12 moving averages and 8 out of 12 oscillators being in the sell zone. The SMA100 is still on top of the SMA200 on this time-frame, so there’s less resistance to the upside, and the Stochastic is already signaling “oversold”.
There is also buyer pressure forming on the short time-frame which has kept the price afloat so far, with the overall signal being strongly in favor of buyers. Our conclusion is that the price will struggle to break the $1,030 range, while further drops to $1,000 and below are possible if bears keep pushing.
Bitcoin Bubble Talks Start Circulating
The current position Bitcoin’s in again opened up the same old discussions about how far the cryptocurrency will reach before its bubble bursts. In the past years, when Bitcoin was still lacking the media attention it has today, talks of bubbles were also present, but not as prominent. But now when 1BTC has kept a price of over $1,000 for such a long time, these talks keep popping up more frequently.
One contributor from Forbes suspects that there are plenty of reasons to be wary of Bitcoin, the key being that it lacks regulation, which means the Federal Reserve is not supporting it to keep its value afloat nor is the FDIC insuring it. But while the lack of regulation is no new news, Wasik (contributor), believes it’s the hype for Bitcoin as an alternative currency that’s going up, which, according to him, is dangerous.
The gist is that people are getting too carried away over Bitcoin’s value that they will ignore the warning signs that apply to any financial asset, which clearly indicate that one can never know, even approximately, where Bitcoin will end up. Yet, as true as those words are, there’s no denying that people have been aware of this truth right from the start, and chose Bitcoins not as a traditional stock but as something more.