Bitcoin: No Time To Panic

The cryptocurrency market is back in the downtrend, dashing the hopes of those who were absolutely sure of a new hype cycle, that could push bitcoin prices back up above the $10 000 mark, just a couple days ago. However, it’s not the time to panic, at least because it’s is the worst thing a trader do when dealing with the financial markets. It is worth noting that huge trading mistakes and extremely rash decisions are usually made during such moments of turmoil.

Let’s take a look at the present situation. Even with the last correction, bitcoin prices remain significantly higher than the June low of $ 5,630, which means that before we can even start talking about the resumption of the downtrend, the price needs to first break below its multi-month low, located below $ 5500. We suggest you to also take into account the simple nature of any trend movement - the eternal struggle of bulls and bears, buyers and sellers when the initiative constantly passes from the first to the second and vice versa. In other words, corrective pullbacks are an integral part of any trend movement, which has been keeping its upside momentum.

The news background analysis also shows that the current market disappointment doesn’t seem so far-fetched. Everyone without exception keeps their eyes on Bitcoin-based ETF, which is yet to be approved by the US Securities and Exchange Commission (SEC). A few days ago, the SEC decided to delay making a decision on whether to approve five bitcoin-related exchange-traded funds until September. That’s what caused such frustration in the market, as traders had been looking forward to a potential inflow of new funds and expected it to happen a little earlier. Eventually, this decision will still be made, and, most likely, it will be positive.

We believe that the influx of institutional investors is almost inevitable. Moreover, it has already begun. Grayscale Investments, for instance, has recently announced that it attracts almost $ 10 million every week. The fund provider behind the Bitcoin Investment Trust has allegedly onboarded more than $ 248 million in new investments in the first half of 2018, despite the fact that at the beginning of January 2018 the cryptocurrency markets plunged 75% off their record highs. The average amount of weekly investments is $ 9.5 million. At the end of July 2018, Grayscale Investments managed $ 1.35 billion. Perhaps an even more vivid example of genuine interest to the crypto sector from the major financial players is the recent purchase of the Poloniex exchange acquired for $400 million by Circle, a Goldman Sachs-backed Startup.

The industry keeps attracting investments because, among other things, it’s now on the verge of a massive breakthrough, which may prove to be much more dynamic than gold’s growth after the introduction of precious metals ETFs. With the advent of such contracts, the value of gold increased 5-fold. Bitcoin has good chances to outperform this result. However, only those who can see the potential of the entire crypto sector in general, will be able to participate and benefit from this rally, especially when it’s clearly not always associated with rampant growth.