The volatility in Bitcoin is set to drop next year as the world’s most famous cryptocurrency becomes more mainstream which may see the price move towards $12;000.
The volatility in bitcoin is what scares a lot of investors off, and especially the institutional one’s who see the wild swings as the major reason to avoid the cryptocurrency but according to one analyst this is all set to change. With the introduction of futures and other instruments, connected with Bitcoin the interest will ultimately grow and lead to higher prices according to Bloomberg Intelligence senior commodity strategist Mike McGlone.
"Bitcoin price volatility should continue to decline in 2020, with the transition from a bear to a bull market apparently over. Increasing institutional interest and vehicles for exposure -- futures, options, Bakkt -- are part of the maturity process. Prices appear to be increasingly caged, with $6,000-$12,000 marking the majority of the range's bell curve." He said
Mr McGlone believes Bitcoin has built a solid foundation throughout 2019 and with the new found interest from the wider market the year 2020 for the cryptocurrency is looking pretty rosy
"A primary factor supporting appreciation of the bitcoin price next year is its potential to end 2019 near a good support zone. The Dec. 3 price of about $7,300 is essentially the mean, median and mode this year," he wrote. In 2020, we expect Bitcoin to migrate more toward 2019's high close of about $12,730, as opposed to revisiting the $3,360 low." Mr McGlone added.
The range that bitcoin has traded in over the past 2 years has been astonishing, peaking near $20,000 back in December 2017, which was followed by a huge price drop and the development of a bear market which ended in 2019. This year's move above $6,500 signaled an end to that bear market and although there has been further falls, the price has held up relatively well.
"Bitcoin's most widely traded price is about $6,500, the peak of the bell curve, since the consolidation period starting in June 2018. Sprinting above this level signaled an end to the bear market, and revisiting it portends an extended range-bound slog before a sustained bull market returns” Mcglone added.
He also believes that the market will start treating Bitcoin as a safe haven investment like gold because like the precious metal, the supply is limited which adds another reason to hold it it a diversified portfolio
“The more mature bitcoin becomes the more it resembles the crypto market’s version of gold, especially considering that bitcoin’s supply is limited to 21 million, which means that only about 17% more will be created” said McGlone.
|By clicking "Continue" you will be redirected to the website operated by FIBO Group Holdings Limited, a company registered in Cyprus and regulated by CySEC. Please familiarize yourself with the Terms of Business through the link. Click "Cancel" to remain on this page.|