Yahoo Finance Bitcoin Monthly Forecast – February 2018
Bitcoin prices crashed lower during the month of January as the market seemed to land back on Earth with a thud. The prices fell by around 50% from its highs during the course of the month as the prices fell from the $17000 region to end the month just above the $10000 support region. The prices are likely to continue to be under pressure in the coming month as well as the perception and the attitude of the traders and the investors towards the bitcoin industry and the bitcoin prices seems to have changed.
Bitcoin Prices Move Lower
We have been harping on this ever since the bitcoin futures were introduced a couple of months back. In fact, last month saw the expiry of the first bitcoin futures in the CBOE and the CME exchanges and there was a lot of volatility surrounding this period. We have been saying that the introduction of the bitcoin futures was likely to be a game changer as far as this industry is concerned as for the first time ever, in the fledgling bitcoin industry, the traders have an option to sell or go short on the bitcoin in the market, even though they may not have the bitcoins in the first place.
This development basically levels out the playing field between the bulls and the bears and ever since the time this was introduced, we have been seeing that the prices are under a lot of pressure and we are no longer seeing the huge bull runs that the traders were used to, for much of last year. Also, the bitcoin industry has come under increased scrutiny all over the world with the regulators tightening the screws all round. Last month, it was the South Korean bitcoin industry that was in the limelight as it was initially feared that they would ban the industry as such.
With the ban in China, South Korea has emerged as a powerhouse in this industry and it generates a lot of trading volume and hence, a ban would have affected the industry a great deal. This led to the prices moving lower for a coule of weeks before the regulators finally clarified their position by beginning to tax the crypto exchanges according to the corporate tax structure that is prevalent over there. This assuaged the feelings of the traders in the market but that did not do much to lift the prices if bitcoin which continued to flounder to close the month.
Volatile Market Ahead
Looking ahead to the month of February, we are likely to see the BTC prices continue to be under pressure as the traders are wary of pushing the prices too high with so much uncertainty still hanging around the markets and the regulation as well. We have also had news that FB has banned ads of ICOs and this is likely to hit the ICOs hard as they had found the FB ads as an easy and cheap method of reaching out to their target market. Also, with the volatility in the market also coming down, we are also seeing the speculators moving out of the BTC market and looking for other altcoins that are likely to have a lot of volatility to satisfy their greed.
But, these are all signs of added maturity in the market and these signs of regulation and maturity in the industry is likely to draw in the larger investors who are looking for returns and a decent level of safety as well. But we doubt that things would settle down in the coming month and with the Chinese New Year also around the corner, this is likely to keep the Chinese traders out of the picture for the timebeing atleast and they might also try to liquidate their positions for the holidays. We could see the prices pick up towards the second half of the month as the Chinese return back from their New Year. Overall, an interesting and volatile month ahead.
This article was originally posted on FX Empire
