Just Before Christmas, Bitcoin Defied Predictions Below $3,000

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Just Before Christmas, Bitcoin Defied Predictions Below $3,000

Just Before Christmas, Bitcoin Defied Predictions Below $3,000

Cryptocurrency bears who predicted Bitcoin falling below the $3,000 exchange price before Christmas did not get to see such pronounced losses; however, sellers were quite active on the weekend prior to the holiday. The third week of December was not kind to the world’s most valuable digital currency, but sporadic buying volume and high volatility caused BTC/USD to touch the $4,200 level a couple of times.

Just when it seemed that Bitcoin was headed on a crash course below $3,000, Wall Street experienced an even more crushing week, and this actually resulted in a slight recovery of the cryptocurrency markets. Analysts are now used to seeing increased trading of cryptocurrencies whenever Wall Street takes a beating, and this seems to be related to a flow of day traders seeking greater market action. Buying volume spiked on December 21, but it did not last long; BTC/USD lost about 5 percent over the following 24 hours.

Continuing Predictions of Bitcoin’s Value

BTC continues to perform better than its contentious hard forks known as Bitcoin Gold and Bitcoin Cash. Short-term projections for BTC/USD call for $4,500 and $5,000 after Christmas, but many investors were sitting on the sidelines as they waited for approval of a new Bitcoin futures contract. According to a report published by The Wall Street Journal, the parent company of the New York Stock Exchange is optimistic about getting approval for a new trading product that would actually be settled in Bitcoin tokens instead of dollars; this would go a long way in making it different from the futures contracts currently offered by the Chicago Mercantile Exchange and its immediate competitor, the Chicago Board Options Exchange.

Approval of the aforementioned futures contract would be a major development for Bitcoin since it would signal a formal intention by Wall Street to convince institutional investors to jump in the game; however, there are valid concerns about volatility. At a time when major retail chains such as Starbucks are contemplating accepting Bitcoin, a major influx of institutional investors shorting the market would disappoint customers who would not be happy with having to spend more for their coffee.

Despite being more than 70 percent down for the year, Bitcoin continued to attract bullish predictions. According to David Thomas, an executive with the GlobalBlock digital currency broker of London, BTC/USD will take more than six months to recover and return to levels close to $10,000; this forecast is based on technical analysis showing that it takes more than 36 weeks for digital currencies to recover from a crash.

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