21 March, 2018

Overview of the state of the bitcoin market in January 2018

End of 2017 – early 2018 was marked by the fall of bitcoin. Nevertheless, there is nothing surprising in the current market fall, the bearish trend is typical for the state at the beginning of the year, which is reflected in Fig. 1.


Figure 1 – Bitcoin rate for January-December 2016-2018.

Note that the prolonged depressed state of the market left a mark unwarranted rapid growth of bitcoin in late 2017, as well as news from the Chinese authorities about the intention to legislate the ban on the use of crypto currency as a means of payment for all financial organizations inside the state.


Nevertheless, even in such a situation it is not


necessary to panic and rush to sell assets, the market is overheated and it needs to give some time to correct the exchange rate and change the mood of the players.


At the beginning of February 7, 2018 after a long drop, the bitcoin rate is in an uptrend and for the day it showed an increase of + 10.42% (based on the quotation of the Bitfinex exchange) and is at a price level of $ 7,600. After the rebound to $ 13,000 for January 21, 2013, the market fixed a correction of the exchange rate and, as predicted, there was a drop to $ 10,000 and a new minimum level of $ 7,000 was reached.


At the current situation, it is recommended to enter the position on rollbacks, the support level is seen $ 6,800 – $ 7,200. However, with a fall below $ 6,800, a further decline in the market is predicted and possible achievement of new minimum points. Stop-loss is set at $ 5,900$; as the following goals are seen marks of $ 8,500 and $ 9,200.


Speaking about the long-term forecast, it should be noted that having shown a stunning growth of 1460% over the past year, in 2018, we should expect a significant slowdown in the growth rate of bitcoin. This is primarily due to the growing popularity of bitcoin as a means of investing and paying on the global financial arena and the interest of a certain list of states in working out tough mechanisms for regulating crypto-currencies, and of individual states and developing restrictive measures aimed at limiting the distribution of bitcoin. On the other hand, there is an intensification of the competitive positions of other crypto-currencies, as well as entry barriers are tightened, which is associated with the complication of the procedure and the rise in the cost of entering the bitcoin market. These reasons may lead to a decrease in the interest of market-makers in bitcoin as the main asset and diversification of assets towards younger and perspective crypto-currencies.


In this case, do not forget that as a decentralized asset, in fact, provided only by investors’ expectations, bitcoin is a speculative instrument. While society is embraced by bitkion hysteria it’s worth, at least, expect to maintain its present value level, and most likely further increase. However, in view of this particular fact, it is not possible to provide a long-term forecast of the exchange rate with a high probability.