Bitcoin Price Forecast
Over the last week, there was a broad-based recovery in the cryptocurrency market as memories of a Chinese crackdown faded into the rearview. It was front-page Bitcoin news.
That said, let’s not pretend that the recovery is evenly spread—it isn’t.
There is a handy little metric called BTC dominance that shows us Bitcoin’s market share as a percentage of total cryptocurrency market share. In the last week, it rose steadily from 47.5% to 49.3%.
What does that mean?
It means that investors consolidated around Bitcoin. Sometimes this signals trouble in the market, a rush to safety, much like when investors rush from stocks to gold in times of crisis.
But that’s not what happened last week.
It was more like a cautious rally, in which traders want to re-enter the market from fiat currency, but don’t want to take too big a risk. We know this because the overall crypto market cap crossed above $150.0 billion for the first time since September 12.
Moreover, Bitcoin’s geographical base is more diversified than other cryptocurrencies, which is how it has managed to withstand a lot of shocks. None of its exchanges account for more than 10% of all trading activity.
In any case, it’s important to note that BTC prices gained 15% over the last week. The Bitcoin to USD exchange rate is now at around $4,426.01.
Where Bitcoin prices go in the short term is not up to me, but rather the regulatory environments of Bitcoin’s major trading centers.
If more of them follow China’s lead, banning initial coin offerings (ICOs) and domestic trading, then we could be in serious trouble. But, as it stands, I don’t think that is on the horizon. Too many countries are hunting for the correct balance.
Even Christine Lagarde of the International Monetary Fund (IMF) says “it may not be wise to dismiss virtual currencies” because they could give fiat currencies a “run for their money.”
Having someone as powerful as Lagarde take Bitcoin seriously shows it is being normalized all around the world, which takes it one step closer to my $10,000 Bitcoin price forecast for 2018. As such, I remain extremely bullish on this cryptocurrency—barring any exceptional circumstances, of course.