Are Retail Investors Buying? Is Greed Setting In?
Even in the wake of hacks and controversies, Bitcoin never fails to defy critics and “experts” on Twitter as it pushes past $7,000 and pulls altcoins up along with it. The world is once again noticing cryptocurrencies in a wave of excitement not seen since late 2017 engulfed the crypto community.
It’s a welcomed sight for crypto investors. Source: https://coinmarketcap.com/
In such interesting times, it’s good to stay grounded. When Bitcoin goes parabolic, it’s wise to think ahead and understand where the price could be going, as covered by TraderStef.
Other questions now arise as to who is triggering Bitcoin and altcoins to push past so many key levels, and are the cryptocurrencies still almost forgotten by the masses after the crypto winter in 2018?
In the past, Google searches for Bitcoin have often correlated with the price and they highlight the popularity of digital assets at the current time. The 2017 bull market is an excellent example of this:
Source: https://www.reddit.com/r/Bitcoin/comments/7fphhf/the_relationship_between_bitcoins_price_and/
Correlation between search patterns and other cryptocurrencies can also be identified if one takes a zoomed-out perspective:
It’s important to note that historic trends are not a guarantee of future events or a repeat of events. If we look at Google search trends THIS YEAR and look at the market sentiment and prices in digital assets, we see something very interesting…
Source: https://trends.google.com/trends/explore?q=bitcoin
Google search trends for Bitcoin are still low compared to the beginning of the last rally and had steadily declined throughout 2018. Ironically, searches began to increase from April 1st when BTC unexpectedly broke above $4,000, and it increased during the Bitcoin Cash civil war, with searches for Bitcoin SV increasing by over 4,000%.
Source : https://trends.google.com/trends/explore?date=today%205-y&q=bitcoin
With retail investors still emerging from their crypto winter slumber, could it be institutional investors that are buying all the Bitcoin and causing the prices to rise as 2019 progresses?
The Surge is Likely a Combination of Different Catalysts: Institutional Investors, USD Tether, and Other Influencing Factors Pushing the Price Higher
There’s a good possibility of institutional capital entering the cryptocurrency markets. On an almost weekly basis, there is news of firms exploring digital assets and the underlying technology. This rally could also be triggered by other major influencers.
Recent controversy regarding the USD Tether stablecoin has prompted a migration from the stablecoin back into traditional cryptocurrencies (BTC, LTC, ETH) after audits revealed that only 75% of USDt is backed by real U.S. dollars. The move towards primarily BTC would be a contributing factor to the already bullish trajectory we are witnessing.
Something else worth mentioning in regards to influencing the price is that Binance has stopped all deposits and withdrawals due to the recent hack. The exchange handles some of the largest amounts of volume in the sector.
Trading is enabled on the platform but no set date has been given as to when deposit and withdrawal features will return to normal.
When users’ funds are no longer locked in the exchange, all eyes will be on Binance to see how the markets react as users deposit funds to take profit. To be devil’s advocate to this, there are a myriad of other exchanges open for trade in the meantime, so the effect on the price could be negligible.
FOMO by the masses might still go into overdrive once again. The biggest blockchain event on Earth, Consensus 2019, is about to begin this week, and global hype could increase around blockchain and cryptocurrencies as the event brings large amounts of mainstream attention to the emerging sector.
A perfect storm for a crypto bull market could be at play, but a sharp correction is overdue and worth keeping in mind. The clarification of Bitcoin officially being back in a multi-year uptrend remains to be seen.
The key takeaway from the recent months is that cryptocurrencies have the potential to pull a complete U-turn and deliver strongly when the market is in the right condition.
Cryptocurrencies are clearly not dead, but be careful. This is not investment advice; please always do thorough research and only invest what you are willing to lose, especially in times of uncertainty.