The bitcoin prices had a volatile time during the month of February. Towards the end of January, we had seen the expiry of the first futures contract for BTC and this did seem to have a large impact on the BTC market. Also, around the same time, we did have the news from South Korea about exchanges being raided, the regulators seeking information and there were also reports that the government over there could be looking at shutting down the exchanges in total. With South Korea contributing to a large extent as far as the trading volume in BTC is concerned, this brought in huge concern in the BTC market.
Bitcoin Prices Choppy
This led the prices lower and we saw the BTC prices moving as low as the $6000 region and many were ready to write the epitaph for the BTC market. But as we got to the end of January, none of these reports turned out to be true and all that we saw was additional regulations being brought about by the regulators over there and with this, it was clear that they did not have any intention of bringing in a total ban of trading in the South Korean exchanges. This helped the BTC prices to rebound and this rebound continued through till the middle of February as we saw the prices rise from the $6000 region through till close to the $12000 region where they were met with a lot of selling.
This selling led to the end of the bullish leg and the rest of the month was spent in consolidation and ranging between the $10000 and the $12000 regions. A large part of February was marked by the fact that there was not much additional news to rock the BTC markets. We believe that a template has now been set as far as the markets and the regulators are concerned. Either the regulators are going to take in a total ban like that in China or they are going to look to regulate the markets and with the usage of cryptocurrencies increasing around the world, we believe that more and more regulators would be looking to regulate rather than try and ban it totally. This is going to help the market mature and with such a set template, the investors and the traders would no longer have to deal with any surprises and would know how to deal with such situations. That is why we are seeing a sense of calm in the markets towards the end of February.
Bitcoin Market Likely to Consolidate
We are likely to see more of the same in the coming month as we believe that the consolidation would continue in the weeks ahead. The buoyancy has returned to the markets but we doubt whether that would be enough for the bulls to be able to push the prices much higher in due course of time. The major resistance now is near the $12000 region and as the prices have failed in that region over the past couple of times, it is likely to witness a lot more selling the next time. If and when the prices push through that region, we are likely to see the $15000 region as the next target for the bulls.
The volatility in the BTC market, despite the fall a few weeks back, has certainly gone done over the last couple of months and this points to a market that is trying to mature in the long run. We are seeing BTC being accepted in more and more countries and hence we are seeing the entry of larger traders and investors which is only going to keep the BTC market busy in the coming weeks. On the other hand, the volatility is going to come down to more manageable levels in the coming weeks and the fact that many of the traders and speculators, who bought the BTC at higher prices and have hence been caught out of the markets, would not be able to return to the markets unless the prices pick up again and this has led to choppy trading and lightly weaker demand and volatility.
This article was originally posted on FX Empire
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