Bitcoin Rebound May Reach 10 Percent in December

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Bitcoin Rebound May Reach 10 Percent in December

Bitcoin Rebound May Reach 10 Percent in DecemberAfter an extremely challenging November, short-term volatility has returned to the cryptocurrency markets, particularly as it relates to Bitcoin. The world’s most valuable digital currency has dipped below the risky $4,000 level twice in recent days, thus leading analysts to issue cautious forecasts for the rest of 2018.

Trends at the End of November 2018

The final days of November were marked by an uptick in the BTC/USD currency pair, but it fizzled following a push towards $4,400. Market analysts keeping tabs on trading volume are noticing a marked pattern among traders who swoop in each time BTC dips below $4,000; the goal is to collect a few hundred dollars on each trade, and it has worked out for many investors. The $3,500 level was widely discussed during November, and it became a reality that speculators could not afford to ignore.

Analysts who had previously called for BTC/USD to reach $10,000 before the end of the year are now revising their forecasts to a more realistic range between $5,800 and $6,200, and this would require a “Santa Claus rally” to coincide with Wall Street. It should be noted that investors who trade stocks and commodities have also dealt with market corrections in October and November, and Wall Street is also experiencing periods of volatility.

Forecasts of Possible Bitcoin Rally

Given the current level of market volatility, a 10 percent Bitcoin rebound in December is not an unreasonable forecast because technical analysis supports the theory of BTC having reached a bottom; the rationale for this assumption dates back to late 2014, when there was no Santa Claus rally, and the exchange price fell from about $280 all the way down to $177 between Christmas and mid-January. By mid-2016, BTC/USD had rocketed past $750.

The most optimistic forecasts for Bitcoin as the end of the year approaches call for a December rally that would stop at $5,800 and could culminate with a crash. More realistic projections estimate that BTC/USD could rise quickly towards $4,900 once traders boost the digital currency to $4,400. Guarded expectations put Bitcoin in a holding pattern below $5,000 that could extend well into 2019.

Not all Bitcoin forecasts are gloomy. Senior partners at Dechert LLP, an international law firm focused on securities and trading compliance, do not discount the possibility of a Bitcoin exchange-traded fund being granted approval in 2019. Institutional investors are waiting on the sidelines to invest in cryptocurrencies, but they want the most convenient way to do it. Should a Bitcoin ETF be approved in the next few months, reaching $10,000 will not take long.

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