Bitcoin Monthly Outlook – October 2017
The bitcoin market probably faced its biggest challenge yet, or at least for this year, during the course of last month. Just when the bitcoin traders heaved a sigh of relief after the hard fork in August did not lead to a large breakup of the bitcoin industry as was widely expected, came the month of September. This was a month of rapid and debilitating developments as far as the bitcoin market was concerned but it ended the month down but still not out.
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Bitcoin Markets Face a Challenge
The first half of the month saw the news that the Chinese regulators had banned all ICOs and said that no one in China should be investing in ICOs anymore. They also began to trace out the older ICOs as well and said that the owners of those ICOs had to return the funds back to the investors. Considering the fact that China constitutes a large part of trading as far as the crypto markets are concerned and many ICOs target China specifically as there is a huge market, this was a big blow to the industry as a whole.
Though it has been said that the regulators would block everything now only to regulate and release it back later, the market was having none of it and this led to a drop in the prices by about 20% within a matter of days. The prices had been trading close to their highs near the $5000 region but this announcement saw the prices crash down to the $4000 region.
If this were not enough, the Chinese regulators also order all the bitcoin exchanges in China to shut down their operations as they felt that they were being used for money laundering. This was another blow to the industry which saw the bitcoin prices move below $4000 during this period and all looked lost as there was not much buying support. If the bitcoin industry needed to show some maturity and resilience, this was the time. Then followed a period of consolidation and then began the process of slow recovery, a recovery which has since managed to carry the prices back above the $4000 region.
Bitcoin Prices Rebound
With the rebound continuing through to the new month, what does the month of October hold for the bitcoin? The market has shown some remarkable maturity and support during the latter half of last month. As the market shows some strength, we are also seeing more and more traders, who had rushed out on first signs of trouble, coming back into the markets as they now realize that the market is not going to crash but it is here to stay. We are also seeing the market becoming more resilient to shocks as the news of the ICO ban by South Korea has not had the effect that it was expected to have.
Looking at all these, we believe that the bitcoin market is going to have a positive month of October. It has also been getting support from many financial leaders as well like the ECB President Draghi and this should only increase the trust in this market. As trust grows, more traders are drawn into the markets and this helps the market to grow and mature. But another point to note here is the hard fork that is scheduled to be held in November. It is feared that this fork is likely to have a much bigger impact on the bitcoin market than the one in August and with the industry now breaking into three, after the November fork, it is likely to become a battle of which is the bigger and better bitcoin and that isn’t great news for the industry.
So, we expect a positive upcoming month for the bitcoin market but this is likely to be tempered by the uncertainty of the upcoming hard fork. We see resistances coming in at $4400 and then at $4800, where the all-time high lies, and these should limit the moves of the bitcoin prices for the short term. On the downside, the price region around $4000 should serve as a good cushion. Expect some tight range with consolidation being the key for the month.
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This article was originally posted on FX Empire