On Buying or Holding Bitcoin at this Strange Moment in Time
Bitcoin (BTC) has been treading water this week and there is some real uncertainty in the marketplace on what exactly the future holds for the coin that underpins the cryptocurrency universe. BTC has waffled from around $7,100 to a little over $7,500 for the last seven days and this has spurred a serious debate about what comes next.
Bullish analysts are seeing this dip in price as a time to stock up on BTC and other major coins that have dipped like Ethereum and Dash. Dan Morehead, founder of cryptocurrency hedge fund Pantera Capital, was on CNBC pushing forward bullish sentiment. Morehead used as evidence the fact that bitcoin had broken below its 230-day moving average, an event which has historically proven to be an strong sign to buy.
“Without even thinking about it,” he said, “you make an average of 239 percent. That’s the essence of this trade: It rarely ever gets cheap to its long-term average,” added Morehead, a former Goldman Sachs executive. “So today is a good day to be buying.”
For the time being the market seems stable, but the corrective rally following the geopolitical drama in Italy did not really take complete shape. There is little movement to the upside or downside and many are wondering where the money comes from to send BTC back over the $10,000 mark. The lack of large money investment in BTC means a short-term bear market might be here for some time, but there is optimism over the long-term as custodial support makes bulls feel more comfortable to come out into the open.
Domestically, the proposed steel and aluminum tariffs might hurt the dollar. If this does happen, than we might see a situation where investors turn towards BTC to give themselves some protection from Trump and his trade agenda.
Another issue that could boost the price: soccer. The World Cup in Russia is quite a quagmire in Russia because of sanction on the country. Visa and Mastercard do not process digital payments in Russia and many have been using bitcoin to pay for hotels and tickets. This form of payment might only pick up as the World Cup gets underway. If BTC can prove itself as a form of payment at the World Cup, demand will increase. Now, if the heights of 2017 will return this year, that is uncertain but Russia could bust the currency out of its slump and push it above the $10,00 mark.
There are some triggers on the horizon that could set price action soaring, but for the time being investors need to be prepared for the bullish and bearish scenarios ahead.