The past couple of days have been really bad for the largest cryptocurrency and the total market cap. We have seen a major loss in the market cap on a daily basis, and there has even been a show on CNBC named “Bitcoin Funeral” which was a witty introduction to describe the entire situation lately.
The show was also a great way for the host and investor Brian Kelly to outline the facts about Bitcoin and the three major reasons leading to the fact that Bitcoin isn’t dead yet and will recover – despite the $6,000 level which it is positioned at right now.
As Kelly said, there are three reasons why Bitcoin will recover in the mid-term back to its previous support level which is over $10,000 – and they include:
- The negative sentiment from investors signaling imminence of a bottom
- Positive development within the Japanese cryptocurrency exchange market
- Mt. Gox liquidation of bitcoin postponed to 2019
Kelly also noted that during a period in which the market is extremely bullish and optimistic, it is always better to sell and look for a timely opportunity for buying again (when the market is pessimistic).
He also explained that the major correction of the market will likely bottom out in the near future and maybe the next two or three months, beginning a mid-term rally in the fourth quarter of the year.
More importantly, he stated that the Japanese government’s move to tighten the regulations and clean up the market while legitimizing the crypto sector is a positive development in the long run – mainly because it will prevent major hacking attacks like the Coincheck security breach.
According to Kelly:
“Japanese exchanges were ordered to improve business conditions [by the government]. It’s actually a good thing. Short run it’s going to be a little tough because they’re stopping new accounts from coming in but actually they’re cleaning up the system. They’re making sure it’s more robust. Making sure it’s better for people.”
He also emphasized that the delay of Mt. Gox bitcoin sell-off until early 2019 is another optimistic factor to consider, stating:
“Mt. Gox is going into rehabilitation and they’re going to distribute the rest of the $1 billion worth of bitcoin. But here’s what is great about that, they’re not going to distribute it until quarter 1 of 2019. All of the sudden everyone thinks there is going to be a wave of selling. Not happening now,”
All of these factors outlined by Kelly could fuel the next mid-term rally of Bitcoin and bring new positive developments in the global markets.
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