More buyers than sellers, consistent headline coverage, new announcements: these are just some of the reasons why, despite volatility introduced to the market by a recent Bitfinex hack, the Bitcoin price remains stalwart and should have no problem taking out previous highs within 1,000 days.
Bitcoin has had a hectic year – there can be no doubt about that. But through the peaks and valleys a dedicated contingent has championed its benefits and, every day, curious people looked into Bitcoin for the first time to learn how it might benefit their life. Thus, despite hacks, gut-wrenching price volatility, the currency trading volume remains stalwart because of solid demand. Bitcoin hash rate remains steady and, even on the increase, suggesting continued increased security for the network over time. There are 40% more buyers than sellers in the market.
Bitcoin’s price increases come after a Bitfinex which was devastating for many users of the exchange who lost money. This caused a sudden drop in the price of Bitcoin, which has steadily increased since February. Bitcoin maintained its trajectory within a couple weeks of that devastating hack for many.
The bitcoin price drop after Bitfinex is not destined to last long. The sudden event was destined to put pressure – most likely to the downside for, above all else, psychological reasons – on the Bitcoin price, and so it did. I don’t personally attribute Bitfinex’s recent reimbursements of some customers to be cause for the price of Bitcoin to increase.
Throughout the week Bitcoin remained a quiet asset, yet showed stability, leading many analysts to begin whispering of a price outbreak this past weekend. And so it came. Bitcoin participants have never lost their optimism, furthermore, as the literature is rife with discussion about a price increase by the end of the year. This, to be sure, does not represent a novel change of heart within the Bitcoin Community.
The Bitcoin price change comes in the midst of a price correction in the cryptocurrency Monero, which is gaining popularity after reports it was growing more popular on darknet marketplaces. The correction comes after a 14 fold increase in Monero.
The price could, in part, represent an increase in safehaven demand due to soft US jobs data. The US economy added just 151,000 jobs in August compared to the 275,000 added in July.
According to House Ways and Means Chairman Kevin Brady (R-Texas), the “modest pace of job creation, coupled with declining productivity last quarter, means that growth in our paychecks will continue to lag as Americans get weighed down by the rising costs of health care, housing, and college.”
The bitcoin industry continues maturing. There are now Bitcoin debit cards, credit cards, and an increasing number of online industries – including some rather raunchy ones – see the benefit and onboard the crypto-currency as a payment means. Oft, this is due to customer demand. Events like bitfinex might mean short term price implications. But, in the long term, Bitcoin’s fundamentals are more sound than to be affected by poor service in its general ecosystem.
Bitcoin’s price could return to the sub-$600 level, and any retracements down to $520-$530 could mean further trading in the red in the thereafter. But, Bitcoin is also well-positioned to take out critical levels above $650, then $750, and from there one might imagine $1,200 is no problem.
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Last modified: May 21, 2020 10:17 AM UTC