Bull market? - Reasons to believe in it
In the last few days Bitcoin rose 38 percent and absolutely destroyed all resistances rather than just breaking them.
The price is constantly making new highs and thousand of other reasons that indicate that the Bitcoin Price and the cryptocurrencies in general could be about to climb to unseen heights since the beginning of 2018.
Technical, sentiment and even fundamental indicators haven’t suggested such a high degree bullish potential for the crypto market since the golden days back in 2017.
A large variety of crypto-traders, sentiment indicators and fundamental aspects, such as Bitcoin hash rates and the supply that are being halved, are pointing to a new Bull Market for cryptocurrencies.
I have highlighted three different reasons to believe in a potential bullish market. But, how are they going to affect the cryptocurrency prices? Are these reasons solid and sound enough to believe in them?
Well, there is only one way to be sure of it: stand still with fiat money in your wallet while the market can be going up. However, the following bullets points might help you anticipate these price movements:
Technical analysis
After the recent BTC pumps, a very significant part of the technical indicators that you can use in Cryptohopper have been signaling buys. Does this mean these indicators will keep suggesting long positions in the future?
Of course not, however, important resistances that were making the price continue its bearish trend have been broken, which indicates the end of this medium-term downtrend.
Very clear reversal patterns are taking most cryptocurrency charts over. Meanwhile, the crypto community is loading their wallets with crypto or is waiting for a pull-back to open positions.
Sentiment
The market’s sentiment hasn’t stopped rising for nearly 18 months. Sentiment indicators are continuously breaking records during 2019 and are skyrocketing to unseen levels since 2017.
A large variety of these indicators are signalling values around 80, on a scale from 0 to 100. Now we should wonder if the value of this indicator anticipates further price increases or is it driven by past price increases and therefore lagged?
Fundamentals
There is much to say about the fundamentals behind cryptocurrencies and blockchain. In this section, I will focus on the supply side of Bitcoin, the cryptocurrency that is meant to lead the comeback to the all-time highs.
The cut in the automatic Bitcoin supply, commonly known as “ halving”, will reduce the supply of new Bitcoins and the mining profitability by half, is expected to take place on May 2020.
Why should we worry about this in 2019? Normally, markets anticipate future events to include the impact of these ones in the valuation of the asset before they happen, then accounting for the effect of the shocks that they produce.
Historically, the halving has affected the BTC price approximately one year before it took place. The rally that we’ve recently had, could have been highly influenced by the upcoming halving, which might be one of the strongest reasons to believe in a more bullish market.
Conclusion
The crypto sphere is getting very overheated after the recent pumps. Crypto-traders are debating if the Bitcoin price is going to keep increasing to levels above $10,000 or if it will retrace to $7,000 or even $6,000.
The crypto market is known for being one of the most unpredictable markets on earth. Now, it is waking up again and roaring as hard as it did in 2017 after this long hibernation period. These reasons would be more than enough to forecast rises in traditional markets like forex and stocks. However, will Crypto take these indicators into similar account?
Check out our last blog: Bot Trading tips - Cryptohopper signallers.
