Bitcoin future development: Are there any prospects or not?
Bitcoin is a very popular cryptocurrency. But it is very volatile. For this reason, a lot of people think that it isn’t trustworthy. Experts, though, say that Bitcoin is going to be growing in the long-term prospects. We just need time before this cryptocurrency will be used as an electronic payment method. The more people will use this cryptocurrency, the higher price will be.
According to the experts’ opinion, Bitcoin is the payment method of the future and now it hasn’t been utilized at a full capacity. At the same time, we need to understand that this future won’t come so fast. In a short period of time, Bitcoin can drop in price.
There are some reasons why Bitcoin can fall in the nearest future:
- Head and shoulders reversal pattern. This indicator shows a trend reversal pattern.
- Price falling to a support level. Usually, when the price reaches a certain level, the trend changes. But not in this situation. Now, the trend is continuing. However, the situation can be changed at the time you read this article.
- RSI indicator fell under the 50 level. It means that the number of sellers is bigger than the number of people who buy this cryptocurrency. It is a very good signal to sell your Bitcoins if you are a short-term trader.
- Increasing the volumes of selling orders.
These predictions are about technical analysis. If we talk about fundamental laws, the situation is different because there are some reasons why this cryptocurrency continues to be profitable for traders:
- Increasing Bitcoin’s popularity. Bitcoin continues to grow, and it hasn’t already reached its maximum. While it engages more and more people, cryptocurrency will grow. This is a very understandable tendency because demand exceeds supply. It has a very great influence on the price.
- Despite the high competition between different tokens, Bitcoin continues to be a cryptocurrency number 1. This status becomes stronger and stronger with every year. Naturally, other cryptocurrencies have a lot of advantages in comparison to Bitcoin, such as decentralized applications and smart contracts, but pioneers usually have taken their places for relatively long periods of time. Even if they don’t have any advantages in contrast to competitors when they appear.
Bitcoin and pandemic: What is the connection?
Coronavirus pandemic had a positive influence on this cryptocurrency because investors want to save their money and protect them from inflation. It isn’t a secret that the dollar is decreasing now because FRS prints dollars to support people and businesses in the biggest recession since the Second World War. It is associated with inflation and investors want to protect their savings.
Twelve years after its creation, Bitcoin is more popular than ever. Yet, we should understand that it isn’t such a popular currency as a dollar or yen, and it is only trying to assert itself as a reliable and stable currency. Also, this fact is associated with some negative moments. Bitcoin is very volatile.
This price increase is similar to that of 2017. At that time, the price has increased 2 times in one year. It makes big investors pay their attention to the cryptocurrency. Yet, their positive emotions weren’t very long because in the next year, Bitcoin price fell by 70% and this fact makes a lot of investors crying.
The history of Bitcoin is very short but these situations were relatively often. For example, in 2011, the price of Bitcoin increased by 11000%, and the next time, it decreased by 90%. Two years later, in 2013, the price of Bitcoin was increased to 250 dollars and then fell by more than 80%. After that Bitcoin managed to reach the 1,000 dollar level, but this year the price of this cryptocurrency fell to 150 dollars. As we see, such high volatility is a very important argument why this cryptocurrency is interesting only for investors that trade on short-term periods.
Reasons why Bitcoin can grow
People who like Bitcoin very much say that now everything can be different. Previously, the reason for fast price changes were actions made by small traders. Now, digital coins spread very fast. Due to this, they attract attention from the biggest financial companies and banks in the world. This is a very important reason why cryptocurrency can be more stable in the future.
For example, Bitcoin is bought by Fidelity Investments and J.P. Morgan. More than 25% of big investors have Bitcoin in their investment portfolio.
We also need to understand that a very important reason why the cryptocurrency is so volatile now is the fact that journalists attract too much attention to digital tokens. The beginners try to buy this coin because of its popularity. But after they lose, only professionals will stay and use this financial instrument more thoughtfully. Cryptocurrency will become stable because now a very big part of movements is caused by pointless transfers.
One of the most famous financial companies that manages 3,3 trillion dollars said that it launches its own Bitcoin-foundation.
Another sign that shows Bitcoin is becoming a serious payment instrument is supported by PayPal. In October, clients were allowed to buy cryptocurrency. We need to say that it accepted the idea that other cryptocurrencies are also good. This fact says that this sphere is becoming more popular and Bitcoin can substitute other coins and tokens.
Also, this decision led to an increase in the Bitcoin price. Since that time, the price has increased by 70%, and this is a very good result.
To sum up, we can say that the forecasts are very optimistic. However, these predictions can be false because the volatility of Bitcoin is very high, and no one can understand the real tendency of Bitcoin price movement. For example, on November 26th, the price of Bitcoin decreased by 3 thousand dollars. The judgments about new rules of cryptocurrency regulation appeared, and the markets’ reaction was very fast. Due to this, this is a very unstable cryptocurrency, and we can’t say that it can be considered real money in short-term prospects.