Bitcoin has been sitting around the $3,000 mark for the past few months, failing to reach a point of sustainable growth. The largest cryptocurrency hasn’t been able to attain a level where it could experience a surge in prices resulting from increased demand.
The year gone by was one of the worsts Bitcoin ever faced since its inception. The famous cryptocurrency was on a 6-months losing spree, which ended only in February earlier this year. Ever since, Bitcoin has been sitting comfortably around the $3000, which is expected to continue for a few more weeks. However, one of the most popular technical indicators for digital currencies has suggested that Bitcoin may soon face a steep plunge in price, which seems to be inevitable. The digital currency has already started showing signs of slowing down, after a cameo rally since February 15.
Bitcoin has maintained stability around its current price of $3900 for the past few months, decreasing volatility at a steady pace. In spite of this, the Moving Average Convergence Divergence (MACD) indicator of Bitcoin has been declining since the second half of February 2019. This means that the cryptocurrency might soon suffer considerable selling pressure.
The MACD indicator is used by traders and cryptoanalysts to gain a comprehensive insight on trends and momentum of a specific asset. The indicator is calculated by subtracting the 26-period Exponential Moving Average (EMA) from the 12 periods EMA and is primarily used to identify strength or weakness of any specific price trend.
Bitcoin’s MACD indicator is indicating that since the second half of February 2019, long term buying demand for the largest and most expensive cryptocurrency is deteriorating, which means that prices might fall severely due to increased selling pressure. Industry experts have opined that Bitcoin might face a bearish market, similar to what it experienced in November 2018.
Cryptocurrency analyst Mike McGlone stated that the current market situation is similar to what it was in November last year, just before the market collapsed. He added that price differences of different cryptocurrencies are narrowing, and a few sharp rallies may appear as part of a bearish market trend.
Even if the fight between bears and bulls in the market continue, there are certain factors prevalent, leading to increased adoption, which could help the market recover losses conceded in the recent past. The year 2018 has been one of the worst years for the cryptocurrency market, with major cryptocurrencies bleeding throughout. Nonetheless, this hasn’t stopped giant corporations like JP Morgan and Facebook to enter the crypto space.
Business stalwarts are voicing their opinions on cryptocurrencies, now more than ever. Elon Musk of Tesla recently termed Bitcoin as ‘brilliant,’ while Twitter and Square CEO Jack Dorsey recently tweeted that he has been spending a lot to acquire Bitcoins. Also, Apple co-founder Steve Wozniak defended the cryptocurrency by stating that the current decline is not because of any flaw in fundamentals.
Experts have time and again emphasized that for any cryptocurrency, fundamentals and strength are more important than price valuation. As per this concept, moderate price falls aren’t as bad as they appear, because they encourage implementation of blockchain on a large scale. Therefore, these experts suggest that even if Bitcoin experiences price fall, it’s not necessarily a bad thing, as a wide-scale adoption of the cryptocurrency is inevitable.