Yahoo Finance What does early 2018 have in store for Bitcoin?
2017 saw itself out with the promise of a $20,000 Bitcoin, but then snatched it away, along with lots of new “investors” hoping for an early Christmas present.
It wasn’t to be – so – what does 2018 have in store for this crypto?
Firstly, we think that cryptocurrencies are now going to get serious. The newer investors who dipped their toe into the water, only to find themselves drowning, will be very unlikely to return. If Bitcoin, Ethereum, Ripple, Litecoin, and others, can prove themselves during 2018, even newer investors may be enticed into the market to try their luck. But will that happen?
Banks and other “classic” financial institutions are now accepting fintech, cryptocurrencies, and ICOs, much more earnestly. Governments, too, are beginning to realise that Ethereum, for example, is a real, and powerful tool, capable of far more than simply acting as coinage. The concept of ledgers, smart contracts, and blockchain transactions is now on many more agendas.
Bitcoin has come a long way, even since October, when investors were getting excited because it had reached $5,000, at 1) on the daily timeframe chart above. It continued rising through, to 2) where it experienced a setback, which, at the time, had everyone calling time on Bitcoin.
In retrospect, this was a blip – but it showed, once again – the power of the 21-day EMA (exponential moving average) and the 55-day, and 100-day levels as strong support, just as they proved back in mid-September, mid-July, the end of March, and the beginning of January. What this shows, beyond doubt, is that Bitcoin has never closed below the 100-day EMA. This gives us a benchmark to go by.
After the hype and wishful thinking of us all wanting Bitcoin to reach $20,000 by Christmas, at 3) it came as a shock, for some, to find Bitcoin falling to $14,115 on 22nd December. But, again, the 55-day EMA held, at 7) and saw it climb back.
It is currently bouncing around the 21-day EMA. We see two scenarios here, at 4). The first is Bitcoin rising, at 5) to pass the previous resistance level around $16,409. If it does this – and goes higher than $17,000 – it will signal that the buyers are back in control, and Bitcoin should climb even higher again.
If it does the opposite, at 6) and falls below the previous, lowest high, at around $12,872 – it will show that there is more selling than buying – and the price is likely to drop back to the 55-day, 7) or possibly the 100-day EMA, 8).
The remaining indicators on the daily chart are fairly inconclusive at the moment.
The 14-day ADX and DMI indicators, at 9) are flat – with a slight negative edge as the -DMI (red) is above the +DMI (green).
At 10) although the last two indicator dots are red – the first in months not to be blue – the pulse wave is showing a slight upward trend, despite the fact that the color has gone from red to maroon, which would indicate a negative momentum.
Lastly, since showing the start of the recent downtrend, at 11) the divergence indicator has fallen, and we await a red dot signal, which would indicate a potential rise taking place. We would expect this to happen at 12) and probably, quite soon.
As a backdrop to all of this, there is a strong rumor that Amazon is about to accept Bitcoin as a method of payment. Patrick Byrne, the CEO of Overstock, has stated that Amazon will soon have no choice but to start accepting it. He is quoted as saying, “… they have to follow suit. I’ll be stunned if they don’t because they can’t just cede that part of the market to us if we are the only main large retail site taking Bitcoin.” Scott Mullins, an Amazon executive has confirmed that Amazon is, “working with financial institutions and crypto-experts to spur innovation, and facilitate frictionless experimentation.”
If the Amazon rumor turns out to be true – Bitcoin will probably go into orbit! Be prepared…
This article was originally posted on FX Empire
