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Bitcoin News Article: 11/11/2017
Bitcoin News:
Theories on Bitcoin Price Fluctuations After SegWit2x
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By Bradford Basinger
Are Fluctuations in Bitcoin Prices Cause For Concern?
The big announcement for the week for Bitcoin news, and the entire cryptocurrency marketplace for that matte was the cancellation of the controversial hard fork Bitcoin had proposed dubbed SegWit2x. While both sides seemed to show signs of relief from the calling off of the hard fork, the markets are showing mixed signals. With the announcement on Wednesday November 9, 2017, Thursday and Friday trading had the Bitcoin fans talking on chat boards. Here is what has happened so far.
On the day following the announcement of the cancelling of SegWit2x, altcoins shot up in price, as Bitcoin saw a significant fall in price. While not too surprising to some to see the price of Bitcoin fall in favor of altcoins on such a big announcement, the big surprise came in the next day of trading on Friday November 10, 2017. While Bitcoin remained in a downward trend, altcoins seemed to follow that trend to close the week out. A few coins however had breakout days, including one of particular interest to all, Bitcoin Cash or BCH.
While altcoins were losing all their Thursday gains from the Bitcoin announcement, Bitcoin Cash made a huge run going from the high $300 range to over $1,250 at the time of this article being written according to CoinMarketCap.com on Saturday November, 11, 2017. While speculation as to what is happening spanning a wide spectrum of opinions on the internet chat boards and throughout social media, with everything from the Bitcoin bubble has burst, to Bitcoin is dead being posted. We think that the real reason for the fluctuations in price lie somewhere in between.
Our Theory On The Cryptocurrency Market Fluctuations After SegWit2x
It is pretty much general consensus that SegWit2x, and the ultimate cancellation of it, has played a big role in the fluctuation of prices in Bitcoin markets, and cryptocurrency markets as a whole. Most of the debate seems to be among whether or not Bitcoin was in a bubble and whether or not the slide in price will continue, and then for how long will the slide downward continue. While some think Bitcoin was a bubble, and now the bubble has popped, we think that there are some other factors at play proving that the cryptocurrency market is still on solid ground and ripe for more gains.
First, there's the rise in price of Bitcoin Cash and the correlation between volume in Bitcoin and the volume in Bitcoin Cash. The two are so close in quantity that it is blatantly obvious that most of the money being sold off on Bitcoin, is being reinvested into Bitcoin Cash. We can tell that by both the increase in price and the correlation in volume. While some speculate this is a rush out of the original Bitcoin, we seem to think this is simply a sell off so that major investors can lock in their gains. Feeling comfortable with Bitcoin, we believe investors feel safer in Bitcoin Cash, since they have some familiarity with it now having held on to Bitcoin for so long.
While Bitcoin has fell almost $1,000 since the cancellation of SegWit2x, it is still up for the year over $5,000 per Bitcoin. While we most think that investors were wanting the free money with the SetWit2x fork and issuance of a new coin, now that it's not going to happen investors want to cash in on what they have earned already. Let's not forget it's the end of the year too and investors always do what they can to prepare for tax season. The move into Bitcoin Cash not only raises the price of the Bitcoin Cash coin to make gains as well, but it's also a fairly safe play since Bitcoin Cash was down almost $600 from it's original price. Whether this is a pump up play by big investors or not, the game will soon change if CME Group is approved for Bitcoin futures trading.
In addition to cashing out on profits, it seems as if many investors are still looking to take long positions on Bitcoin. The recent selloff seems to be in preparation for another long Bitcoin run to who knows what price it might stop at with a big market like CME Group coming on board. If CME Group is approved to trade Bitcoin futures, the whole cryptocurrency market will see a huge capitalization of coins as a result. Bitcoin is and will remain for the time being the digital currency of choice for exchanges to trade through or with. While some exchanges are coming out with trading between multiple coin pairings, most of them still only allow trade pairings with BTC, ETH, or Litecoin with Tether making an appearance at a lot of exchanges now as well. Either way, early investors can make Bitcoin look more appealing to buy in early trading with CME Group at a lower price than a record high.
Bitcoin Isn't Going Anywhere For Now
With Goldman Sachs having favorable opinions of Bitcoin as well, look for more volume in regards to Bitcoin and Bitcoin Cash. With both Goldman Sachs and CME Group each having more capital than the entire cryptocurrency market combined, we don't think Bitcoin's rise in price is done just yet. As more money comes into the cryptocurrency markets, more Bitcoin will have to be purchased as a trading pair on most of the major exchanges. Let's also not forget that Bitcoin is the popularity winner among digital currencies, so many investors will ride another Bitcoin price increase to profits while evaluating some of the other blockchain technology out there.
We aren't financial or economic experts like some making claims on what has happened, however our analytical evaluation of the situation shows Bitcoin making a comeback after a sell off by some investors to claim profits. When CME Group comes on board, look for another big run out of Bitcoin, and more than likely the altcoins as well. It's up to you to do your own research, but this writer will be holding on to his Bitcoin for just now.
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