Bitcoin began 2019 is a relatively buoyant state and even displayed rare signs of stability. However, the flagship cryptocurrency soon returned to its turbulent ways and nosedived in value in the early hours of today, Monday, January 28. But some bitcoin traders believe there are actually optimistic signs, after analysing the BTC moving average.
Moving averages are calculated by adding the closing price of bitcoin for a number of time periods and then dividing this total by the number of time periods.
Alex Melen, an American cryptocurrency trader, recently touted reasons for bullish sentiment relating to bitcoin.
Mr Melen pointed out how the last time that bitcoin crossed under the 50 and 200 moving average across four days was when 2014/2015’s bear marked finally bottomed.
When a currency bottoms out, it means the stock has reached its low point and could be in the early stages of an upward trend.
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And this potentially auspicious event has struck bitcoin again.
So there is a chance bitcoin could find a longer-term bottom in the coming weeks and months, as parallels continued to be drawn between the cryptocurrency’s previous and current price conditions.
And Moon Overlord, a pseudonymous crypto trader, is also an optimistic pundit believing that a bottom is on its way.
Moon Overlord has cited historical analysis to express: “Bitcoin has traditionally started pumping around one year on average before it’s halving date.”
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And as the next issuance shift is slated to occur during May 2020, BTC could begin trending higher in only a few months.
However, while the aforementioned comments make it seem like a rally is imminent, others are less confident.
Anthony Pompliano of Morgan Creek Digital recently noted that although BTC is unlikely to fall further – less than $3,000 is possible – this market is not yet ready to run.
The decentralist, who has been overtly skeptical of banks, noted that instead of falling further, BTC may begin to range trade, potentially between $2,500 and $4,500 for much of 2019.
Pompliano’s comments came weeks after Fred Wilson, a leading venture capitalist, took to his personal blog to remark that the broader crypto market may take much of 2019 to bottom out.
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Is demand for Bitcoin moving to gold?
Bitcoin has been unable to rise above $4,000 in the last few weeks.
Consequently demand for the ailing digital asset, which was once drawing people away from traditional investments such as gold, is waning and attention is shifting elsewhere.
According to Jan Van Eck, the Chief Executive Officer of Van Eck Associates, demand is moving away from Bitcoin and back to a more traditional commodity – gold.
Van Eck said: “I do think that Bitcoin pulled a little bit of demand away from gold last year, in 2017.
“Interestingly, we just polled 4,000 bitcoin investors and their number one investment for 2019 is actually gold. So gold lost to bitcoin and now it’s going the other way.”