Why bitcoin has not managed to conquer the world
Cryptocurrency has again shown its volatile nature. And intelligence community estimated the prospects of the approval of the Bitcoin ETF, however, the postponement of the consideration of applications for September triggered a sharp sale of digital assets, disappointing investors.
After the appearance of the news bitcoin lost 12.5%, altcoins fell much stronger. The total capitalization of the stock market dipped from August 7 to $26 billion to 225 billion.
Bitcoin is back to the levels where started the recent rally is based on expectations of the SEC. Despite the fact that this morning resumed the decline in BTC, the RSI indicator is no longer delivers a signal to sell. After touching oversold levels in the middle of the week, a bitcoin can re-stabilize in the range of $6000-$6500 for the next few days waiting for new triggers.
In a broader perspective it is worth noting the formation of the downward channel of Bitcoin (a series of consistently lower highs and lows). Through this channel new local lows BTCUSD in case of continuation of sales can be in the $5500 to the October lows to November 2017.
Why bitcoin cannot be a currency
Widespread adoption of cryptocurrencies ordinary investors and users prevents increased volatility.Cryptocurrency can be difficult to break into the mainstream, when the reference cryptocurrency might one day lose 7% or more on relatively ordinary news. However, until it becomes tender more widespread use impossible.
Paradoxically, the fact: in times when bitcoin is used on the darknet to buy illegal products, BTC really fulfill the role of means of payment. Now it has become a tool for speculators and asset storage “HODL’jers”.
ICO no chance of success
The second negative factor for the market is ICO, which really brought a lot of money, but there is no loud “in real life” at an advanced stage of implementation.
It is likely that for a narrow circle of ICO projects do meet the goal, but mass generally known and available product and is not and may not appear, which again leaves issued tokens and projects in the shadow of the mainstream and without a chance of success.
Opportunities for bitcoin in countries with a weak economy
At the moment, in a positive for digital currencies can be the popularity in an economically and politically troubled countries, which contribute to the real use of tokens as means of payment.
It is interesting in countries such as Venezuela with inflation of the Bolivar to 86,000%. Compared with the price dynamics of the local currency, the exchange rate of BTC seems pretty stable and allows residents to get around bans and to operate the asset with a more stable rate than the national currency.
However, the volume of Venezuelan, and even some African or middle Eastern economies is not enough in order to create sustainable momentum for the cryptocurrency.
Bitcoin in the hands of speculators
Needs developed capital markets. While the future of cryptocurrency in the hands of speculators, industrial miners, whales and regulators, the rally will not be a “tug of war” between bears and bulls will last exactly until that moment, until the patience of the last enthusiasts in combination with the technical and financial deadlock in the networking.