Considering the crypto boom that arose at the beginning of last year, it’s hard not to mention the most famous cryptocurrency. In 2017, there were many predictions, as before the formation bitcoin cash (BTC) and after. Even after two months of 2018, analysts are afraid to make a long-term analysis regarding the movement of the coin’s exchange rate, but we will try to consider the factors, and predict the value of Bitcoin cryptocurrency by the end of 2018.
What will affect the forecast of Bitcoin in 2018
In order to give readers an accurate forecast of Bitcoin prices in 2018, we conducted a detailed analysis of the movement of quotes and analyzed the fundamental pricing factors that are key triggers in the cryptocurrency market:
- Mining cost.
- Measures for carrying out cryptocurrency regulation in the main countries of bidders.
- Trading volume by operations.
- Bitcoin liquidity limit.
- Technical problems of implementation.
- The emerging fundamental component of the exchange in 2018.
- Market sentiment.
Fundamental forecast factors for the Bitcoin price
Let’s start with the acquisition of a fundamental component by Bitcoin, which it did not have until August 2017 and was not taken into account in the forecast. According to current information, the cost of bitcoin mining over the past 6 months has increased by almost 4 times. It’s connected with:
- a general increase in network capacity;
- joining the mining of large factories in China and Finland;
- changes in the cost of mining equipment;
- increase in the number of mining farms.
It is mining that determines the base cost of BTC and plays a fundamental role in building a forecast. If earlier, at a market price of one coin of $1200-1500, the cost in relation to costs was $280, today, to mine one bitcoin within the pool, you need to make an effort of 2100-2300 USD.
These calculations include the cost of mining equipment (Asic antminer v13) and electricity costs, in addition, the cost of mining has increased due to the size of the pools. With an equal distribution in the pools, the block reward was previously divided among a smaller number of participants, which made it possible to receive more cryptocurrency per unit of effort expended.
Cryptocurrency regulation is what stopped Bitcoin prices from rising to $50,000. per unit, and turned in the opposite direction. The regulation did not intend to influence the value of the currency, it wanted to limit the number of market participants who, using shadow platforms, carried out tax-free speculative transactions.
Recall that outside the CIS, trading activities are subject to tax, which is calculated not from profit, but from income from transactions. this leads to the fact that up to 15% of the net profit of each trader goes to the state treasury, and sometimes more.
At the same time, Bitcoin – which was not regulated in any way – worked solely due to technical factors, which, with little liquidity, made it fluctuate around $8,000 per week. With such activity, profit traders and the percentage of market participants has increased significantly, especially in China.
As the forecast showed earlier, this led to the appearance on the market of a huge number of newcomers who traded Bitcoin without understanding the essence, but only seeing growth, a wave of purchases increased the growth rate and, accordingly, the daily volatility of the instrument. The regulation was supposed to bring Bitcoin trading back to normal and reduce market activity, but led to a massive wave of selling, as most crypto traders were unwilling to pay taxes on their profits.
This was due to the fact that market participants were trading using a huge leverage, and their real profit in relation to the volume of transactions was lower. As a result, the regulation of cryptocurrencies reduced the size of the market, and the wave of sales that preceded stabilization led to a major drop in the exchange rate.
So with the exit from the South Korean market, Bitcoin made its last jump from 11,000 to 6,300.
However, bitcoin regulation is not a bad factor, it allows you to stabilize the rate and reduce the activity of the instrument. If you take a closer look at the BTC rate in the period before and after the regulation, then after the correction associated with large waves of sales, Bitcoin returned the general upward direction, which happened with less volatility.
Analysis of the technical problems of Bitcoin as a means of payment
Bitcoins in 2016, despite their relatively low cost, reached the highest point of their development. this was due to the relatively low load on the network, extremely low commissions (which barely reached 1 cent for any transaction) and high settlement speed.
With equal confidence and speed, Bitcoin could pay for a cup of coffee, or send money to the other side of the world, both transactions would take from 1 to 10 seconds.
With the emergence of a large number of miners and traders (including HFT bots), Bitcoin experienced network congestion for the first time in history. which led to queues and an increase in commission.
This resulted in:
- The death of bitcoin as the main means of payment instead of fiat.
- The first separation ha BCH and BTC.
In particular, today BitcoinCash took the same place, with the same rate and volatility, that Bitcoin occupied at the end of the 16th year. The increased block size, although it complicated the cost of mining, however, solved the main problem – payment queues.
All this led to the fact that BCH took about 15% of capitalization from BTC and over time, the market share in relation to BTC will reach 35%. As a result – a decrease in Bitcoin volatility, and a gradual fall relative to the peak possible value.
Those. If today they predict a maximum of 12-13 thousand in the bitcoin rate, with an average volatility of 1000 USD. day. Then in the future, the maximum peak of bitcoin will decrease to 10-11 thousand, with a maximum volatility of 650 USD.
So, looking at the chart, after each major dip in the news, we see a smoother rise with lesser intensity.
Technical factors in Bitkin’s forecast
Despite the appearance of a huge amount of fundamentalism in the Bitcoin forecast, it depends even more on market sentiment than on fundamental factors. The reaction to the news among the majority of traders is strictly unambiguous, which provokes large jumps, which are distinguished from other assets due to volatility.
The market mood for the crypto asset is favorable due to a decrease in the number of speculative traders – the professional market is settling down, and long-term investors predict growth and continue to hold the asset in their portfolios.
What if there is a correction?
A big pullback in the value of Bitcoin at the beginning of 2018 is predicted by major players and experts as a market correction. This is easy to determine if you look at the weekly or monthly chart. So, from the point of early December, when Bitcoin first reached $ 6,000, interest in it and, as a result, a large purchasing power on the part of speculative investors, moved non-stop to the very top. The next forecast was for a correction at $10,000, then $12,000, then $15,000. Bitcoin failed to break through the psychological mark of $20,000 per unit, which triggered the start of a big fall.
Bitcoin price forecast until the end of 2018 in the table
|Name months||Price Forecast||Close M.N.||Monthly %|
|March||5865 – 11703||6989||-32.7|
|April||5468 – 8255||5877||-16.1|
|May||5576 – 6414||5994||2.0|
|June||4682 – 5996||5039||-15.9|
|July||5037 – 6250||5844||16.2|
|August||5844 – 7253||6780||16.1|
|September||6775 – 8410||7859||15.9|
|October||6768 – 7862||7274||-7.3|
|November||7275 – 9029||8438||16.1|
|December||8439 – 10473||9788||16.2|
There is nothing wrong with the correction itself, as it has stabilized the rebound, adjusted for the duration of the trend. If the correction had taken place earlier, the exchange rate fluctuations would not have been so significant for an ordinary trader or an investor, which would not lead to a panic and a massive sale of Bitcoins.
Many analysts predict that the correction of Bitcoin is coming to an end, and as soon as it touches the mark of 5600-5900, we will see a flat, and after that the price will start moving according to the principles of classical technical analysis.
The resulting Bitcoin forecast for 2018
Sample to form an unambiguous Bitcoin forecast at the beginning of 2018 is to deceive investors and traders. Nevertheless, from all of the above, we can draw several conclusions regarding the behavior in the coming months, and give a couple of predictions regarding the value of the coin.
- In the near future, we expect a continuation of the correction, which will drive Bitcoin into the range of 5-7 k dollars, from which it will not be able to get out until the first fundamental triggers.
- Despite regulatory sanctions from the eastern economy Market sentiment towards Bitcoin is favorablewhich allows us to say that in April we will see a powerful move up.
- The volatility of bitcoin will gradually decrease – and the behavior of the market will stabilize. This is due to a decrease in the number of speculative traders, and an increase in the number of traditional investors.
- Bitcoin will remain the leading currency in terms of capitalization, so the success of altcoins will move up. this is due to the peculiarities of the withdrawal of cryptocurrencies. Forks are withdrawn exclusively through Bitcoin.
- The liquidity of the market is still extremely low, so any decisions of major players can, if not reverse the value, then temporarily make short-term jumps.
With a long-term analysis, the following forecast can be made:
- Formation of a stable upward trend.
- An increase in the market for the derivative of crypto assets. We are already seeing derivative ICOs, besides this, the Bitcoin futures exchange is still empty due to high volatility. But these conditions will help create a powerful options market for cryptoassets.
Generally regarding the current situation with Bitcoin, forecasts for 2018 are favorable. Whether we will be able to see 20,000 again this year, as we did last year, is a rather moot point. With a general decrease in volatility, correction and stabilization on the exchange after the latest news on regulation, we can definitely say that by the end of 2018 Bitcoins will be able to gain a foothold above the current price by at least 25%, and under more favorable conditions, we will expect a price forecast up to up to 23-25 000 $.
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