Bitcoin has lost more than 80 percent of its value from an all-time-high of nearly $20,000 in December 2017. Live Bitcoin prices show that the coin attempt at rebound has generally not shown enough momentum to be regarded as significant.
Analysts are saying that the coin currently trading at $3,486 according to data from Coinmarketcap needs to beat a key resistance located at $3,600. It can be observed that this is $2,200 less than the publicized key resistance of $5,800 for Bitcoin for most of last few months.
Mike Novogratz the founder of Galaxy Digital and a notable Bitcoin bull is among the more cautious Bitcoin enthusiasts. He agrees that revolution doesn’t happen overnight and seems to have lowered his expectations of any significant price movement for Bitcoin.
According to him,
“I did think Bitcoin was going to hold at $6,200,” said Novogratz. “It stayed there for four months. It felt like the selling was finished. But then Bitcoin Cash decided to fork again.”
What is apparent is that Bitcoin has been oversold in the past weeks after the Bitcoin Cash hard fork making it even more difficult to predict the direction of the coin known for its volatility.
Traditionally, falling Bitcoin prices pull down the price of all altcoins and the recent 2018 bear market is not an exception. This has led to a lot of pessimism even among many Bitcoin bulls who now do not see the market as capable of a rebound in 2018 despite previous expectations that there will be a sort of price spike before the end of the year.
For the first time in 18 months, there have been speculations that bitcoin could drop below $3000. Although it is obvious that not all investors have given up on the coin, the situation is that some of the most optimistic are having a second look at the hodling tradition of bitcoin enthusiast.
Interestingly, the biggest hodlers are early enthusiasts who are mostly holding Bitcoin as a long term asset class. There are indications that newer enthusiasts consider bitcoin profit and loss in terms of point of entry.
Based on this concept and the digital currency trading at less than $4,000, it is safe to posit that most of the entrants during the 2017 bull-run are presently hodling at losses.
According to Sumsum90, a Bitcointalk user, investors still holding their positions by refusing to sell their Bitcoin up till now are holding on due to their belief that the coin will make some recovery in future.
“I don’t think that it will go under $2000, and I have been reading the same opinion from different sides these days. I think that quit point depends on the starting point as well, so it is pretty much individual for all of us. If someone entered the game when the price was $8000 and he held his position until now, what difference would $1000 make?”
There is realistically no way of determining exit point of every investor since this is dependent on a number of factors such as resistance to pressure and ability to bear higher risks.
What is obvious is that most hodlers are hoping that the market shows signs of rebound because it has been shown that every investor has their limit of accommodation for bearish markets.
For instance, most hodlers that have benefitted most from the surge in Bitcoin value are those that invested in the cryptocurrency when the value was less than $1000. Should the coin fall below that price, it is likely that most will like to exit the market.
Even though Bitcoin has gained following among many that see great prospects in it, it is likely that most will want to exit before the price falls too low that they are only counting losses.
The effect of such massive exit at say 3 digits prices is not yet known. The hope of recovery at that point will be that most enthusiasts will buy at lower prices when they are confident that the coin has reached its lowest price.
Another hope of recovery is that the massive Bitcoin bull-run has made institutional investors take note of the potentials of Bitcoin investment. What is giving this class of investors second thought is the still unregulated coin market, limited custodial service and general safety of their bitcoins .
Nevertheless, there are indications that this situation will change in the short term especially if the Security and Exchange Commission approves an ETF for bitcoin.
A Trading view Analysis stated regarding current bitcoin prices,
“So the wedge failed (partially) as well, this shows the intention of the market was upwards. We can simply state now, that the $3300/$3200 is a level where buyers are stepping again, they like this level to buy it up.
The previous high at 3990 has been broken and now it seems the $3420-40 level as well. I think we can move to the $3600. This will be the key level for the double bottom pattern. If it goes like this, we should see the $4000 this week.”
Even though volatility is a known feature of Bitcoin price, there have been speculations that this will reduce with greater adoption of the digital currency. There is no indication yet that this is going to happen as seen from the 2018 price drop.
Some analysts are saying that even if there are many investment exits from the coin market, the effect will not be as apparent as we expect unless the whales actually start dumping their coins. Everyone knows that whales are forces to reckon with in terms of effect on the market.
Even though whales are known to hold tenaciously to the coin market and are actively increasing their holdings, there are no guarantees that they will continue to have confidence in constantly dipping bitcoin value.
Interestingly, some of the most committed hodlers of Bitcoin are the earliest who started mining the coin as a hobby without necessarily knowing that it will become something so valuable.
Most of these early miners are among some of the biggest whales and are usually people who can replicate the bitcoin protocol and code to the latter.
The fact that these were neither bitcoin investors nor speculators means that they will likely weather the storms of Bitcoin bear market. They will more or less be the ones that would have witnessed live Bitcoin prices soar from insignificance to prominence and then struggle to find stability as we are witnessing at the moment.
This is one group of hodlers that are certain to stay with Bitcoin throughout various stages of its lifecycle. All other investors are just on the lookout on when there is money to be made leading to entries and exits.
In any case the present low price is the right time to buy bitcoin. This is clear enough because these would likely be the lowests prices for some time.