Is this a good time to suggest that what we have seen today, could be the new normal? Through 2018 we have all pretty much come to terms with the fact that Bitcoin was valued at around $6,000.00. If you asked any investor over the summer, they would argue that indeed, Bitcoin had found balance and as a result, so had the majority of the rest of the markets. Overall, this doesn’t mean cryptocurrencies have lost their volatile streak, as a matter of fact it’s the complete opposite. What we are saying however is that a base level price at $6,000.00 had been found, $6,000.00 was the norm.
Now, many start to believe that this base price has finally dropped, meaning that the current $4,000.00 (ish) value of Bitcoin is the new normal. We could be in this for the long haul. Likewise though, this could be a temporary blip and the norm of 2018 could resume, Bitcoin could move back to $6,000.00 next week, it’s that simple.
So, is this the new norm?
We ask the question because we all need to know what will happen next? Really, there are three possibilities in terms of the value of the likes of Bitcoin, XRP, Ethereum and Stellar. First of all, this could be the new norm and through 2019, the average price of Bitcoin could sit at around $4,000.00, the average price of XRP could sit at $0.35, the average price of Ethereum could sit at $110.00 and the average price of Stellar could sit at $0.15.
The second possibility is that this could be temporary, as the markets wait in anticipation for something bigger and better. With speculation around the looming Bitcoin ETF decision, investors have been trading very carefully and have been pulling value out of the markets simply because they fear what could be to come. As a result of this, values across the market are down, however, assuming much of this speculation comes to a head (for example, a decision is finalised about a large Bitcoin ETF) and of course, assuming all goes to plan, the markets could eventually shoot back up. Now, we’re not talking Bitcoin to $20,000.00 in a day, however a positive move towards a large Bitcoin ETF could see Bitcoin move back up towards $8,000.00, allowing for a more optimistic average price, going into 2019.
The final possibility is the one we really want to avoid - current values could continue to sink. This is most likely to happen if the speculation we are all feeling swings the other way, so, in keeping with the Bitcoin ETF example, if a large ETF application is rejected then indeed, we can only expect the markets to continue to decline. The new normal could in turn be a lot less than we see today.
Remember, this is speculation
There is honestly no way to tell what will happen here. Out of these three positilibites, a forth could arise, such is the volatility of the markets. It’s impossible to pinpoint a ‘norm’ within the markets because let’s face it, cryptocurrency isn’t exactly normal is it? The take home message here is that yes, this does look like a great time to buy, however we should consider that a big price movement could be looming, in any direction too. Therefore, if you do decide to buy, make sure you do your research and make sure you trade safely. Although the markets seem to have balanced out, we are riding on a very exciting but dangerous time for crypto. We’re optimistic that things will go up, but sadly, this is something we can’t ever guarantee.
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