The new wave of growth of the crypto market has attracted the attention of many investors who have forgotten the experience of those who had bought at $20,000. Although no one is waiting for To The Moon, everyone is thinking about possible changes in exchange rate from now on.
is still holding at around $8,000 per coin. Apparently, the price of the asset has again become attractive for investors, since over the past two months the market capitalisation of has grown by 72% — from $145 billion to $249 billion.
The data from Google Trends also show interest from Internet users. According to the resource, when compared with the period of “crypto winter” there is a revival being observed. Statistics on the requests for the price of says that the mood of internet users are at the level of October 2017. It was at the end of that year that the bullish race began, and as a result of which the price of jumped to $ 20,000.
Having noticed the market recovery, fraudsters began to set up their traps. Hoping to cheat new investors with the syndrome of lost profits, Bitconnect crypto pyramid has reappeared. Its new version is called Bitconnect 2.0 and promises to bring profits within a month. It will clarify whether the crypto community has learned its lesson or its memory is the short-term one.
“The fraudsters have just been waiting for that. In a falling market it is difficult to attract newbies. The expectation of growth and the associated hype bring much wider opportunities. So we will definitely see new scam projects, as well as an increase in their number in the crypto sphere. And the stronger and longer the growth of the market, the more fraudsters it will attract, ” claims a analyst Vadim Popov.
End of the bear market
“There are no fundamental reasons for the growth of as well as other for that matter, so it doesn’t make any sense to talk about the arrival of bulls,” believes a well-known cryptanalyst Tony Weiss.
In his opinion, the market behaves irrationally. And we would be able to talk about the end of the bearish trend only after a 30% correction of the price. And at the same time, the prime should try hard to stay above a level of $4000 per coin.
As for Vadim Popov, however — he is sure that the bear market is over. According to the expert NVT Ratio (Transaction Network Cost Indicator) confirms it quite clearly.
“Even if we are going to see a decline, the price is unlikely to return to the levels of February-March, it will simply be a cooling down of the overheated market to acceptable levels, which are likely to be well above $4,000,” explains the expert.
LetKnow.News analyst Vladimir Denisenko also suggests that the bearish cycle is over and that has already passed the“bottom” prices.
“If you ask me about my local expectations from the market. The answer is “correction”. On the chart, according to the CME quotes, a huge gap ($7,200- $8,000) has formed, which is most likely to be followed. From the technical analysis’ point of view, the Fibonacci level of the overall growth takes place at the level of $5800, correction to these levels will not become critical. Up to this figure, for me, the market is to be bullish,” the expert explains.
New parabolic cycle?
Bloomberg Intelligence analyst Mike McGlone also believes that the bear market is over. According to him, the market has been speculative for a long time, but it is unlikely to be entering the phase of a parabolic arc, as it was in 2017. Although according to eToro analyst Mati Greenspan, what we are seeing now is the beginning of a new cycle.
But what is a parabolic arc? This is a pattern that occurs during active asset growth, which is accompanied by irrational purchases and speculations, often amid a bullish rally. At the same time, purchases are accompanied by the blind faith of investors in the eternal rise in the price of an asset against the background of mass hysteria. However, after reaching the peak values, there is a 60–80% correction in the asset price. And this is exactly what we saw on the market in December 2017. And what suddenly happened in May 2019.
“We recently saw it — parabolic growth, completely unhealthy, and most likely caused by the demolition of short orders and self-acceleration for the same reason. I think in the near future such a movement will not be repeated. Afterall, such situations are quite normal for such an unregulated market, and we will observe them from time to time,” says Vadim Popov.
According to Vladimir Denisenko, in 2017 it took only 4 weeks or 720 hours to follow the path to the absolute maximum — from $8,000 level.
“This suggests that anything can happen on the market. I still remain a realist no matter what and I think that a scenario with a correction will be more favourable for the market than such a parabolic growth,” the specialist says.
How much really costs
Traditionally, during a rapid change in the exchange rate of , questions arise about the fair price of the asset. According to JPMorgan analysts, the market value of in May significantly exceeded its cost price. At the same time, a similar situation was in 2017 before the price collapsed to $3,200.
Conglomerate’s experts in order to determine the real value of decided to calculate the production cost of this exchange goods. The calculations are based on the cost of electricity, energy efficiency of the equipment and its computing power. And in 2017 for the real price to correlate with the market price and the fall in exchange rate happened.
At the same time, JPMorgan analysts are confident that the search for a fair price of is a tough task. Since opinions on this issue can be radically different: from the absolute absence of any fundamental value to sky-high levels.
According to Vadim Popov, the sharp growth that we was observed in April and May didn’d look like a “natural” market movement.
“Such growth is more like a tsunami, which demolished the “shorters” and for this reason was self-accelerated and flew into the stratosphere. Therefore, personally, I am waiting for the correction to the reasonable levels, the wave should roll back,” the specialist says.
Since the market is quite manipulative, it is hard to imagine what will happen next. It seems like the bears have already left the stage. However, you mustn’t lose vigilance, because every growth of the market is accompanied by an influx of fraudsters who are trying to capitalise on trusting investors.
Author: Annabella Lapshina
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Published at Fri, 24 May 2019 08:18:56 +0000
