As 2018 is coming to an end, so do all hopes of a Bitcoin market rally. Depressed investor sentiment combined with sideways trading effectively predict a continuation of the current market state until next year. The market seems to be firmly stuck in between support and resistance lines. And save for an unexplained 40% rise in Bitcoin’s transactions per second (TPS) in the last five months, there has been little movement. Technical analysis indicates that Bitcoin is still trading well below the 200 Day Moving Average; that of approximately $7,000. And to kill any lingering hope, a Bitcoin ETF is still a distant prospect.
A big factor holding back the growth of the market is the thriving Futures market. The CME derivatives exchange reported a 41% rise in daily trading volume in Q3. And a recurring 19% rise every quarter including Q2. The effect of the Futures market on Bitcoin’s price has a mixed opinion. The CFTC’s Chairman J. Christopher Giancarlo believes Futures help the crypto market mature. While that may be true, it is still responsible for the slush preventing traction.
Other factors tying prices down is the overall uncertainties surrounding performance of some of the players. Exchanges continue being targeted by hackers and exit scams cost investors tens of millions of dollars. In addition, the SEC is shutting down exchanges, tightening the noose on ICOs issuers, and taking its time with a decision on a Bitcoin ETF. And as if all this wasn’t enough, there is the ongoing Bitcoin Cash fork drama. The outcome of which will reverberate across the market as it will affect Bitmain directly. And Bitmain has a sizeable control on the mining of Bitcoin. All this accounts for the dismal overall trading volume.
It is now obvious that most predictions were either wrong or overtly ambitious. But there is still good cause for optimism. Just as there are negative factors, there are indications that the only thing holding back the market is time. For the moment Bitcoin is stable, and the rise of throughput is quite likely due to heavy OTC transactions. In addition, it can be said that Bitcoin has a strong base at $6,000 which was rarely broken throughout the year. If stability continues, it will set a good foundation for next year’s rally. It will give a chance for the long awaited catalyst (whatever it may be) to ignite trading and expand the market.
The bull market of late 2017 inspired a number of price predictions from many people. And institutional investment reinforced the possibilities of them becoming true. However, the complexities of the market proved too much for the crypto industry to overcome in one year.
In addition, the lack of adoption at any level in 2018 hurt the market. And it is a major contributor to pushing all predictions until next year. Bitcoin’s resilience will be further tested in the upcoming months as will investor’s patience. In the past Bitcoin has experienced slow growth, with Bear markets lasting years. In 2019 Bitcoin’s success will depend on viable development, implementation, and adoption of its technology as well as successful operation of Bakkt and similar exchanges.