Bitcoin cautiously takes new local highs, but memories of previous declines are still too fresh in the memory of investors.
Another weekend rally
At the weekend, we saw another mini-crypto-rally. This weekend rally points out several important changes over the past year.
First, the weakening of speculators pressure, and the appearance of investors on the scene. The fact that growth waves, including recent ones, pass without significant corrections, should be considered as a signal of confidence from at least medium-term investors.
Secondly, along with the cryptocurrency capitalization growth, the faith of market participants is strengthened, that after an 85% market correction from a historic high and a subsequent lull, this phase of decline is over. The current dynamics is similar to the cautious upward movement on the stairs in contrast to the roller coaster that the crypto market experienced in 2017-2018.
Cautious demand returns
It is also worth noting that the cryptocurrency market has not disappeared, and the demand for digital currencies is returned. Although digital currencies are clearly attracting consumer demand, it is not enough at the moment to sustainably overcome new levels of resistance. We must not forget that investors for a long time will be deterred by a collapse of the last year.
Skeptics may dominate the market for a long time, perhaps even until the moment when the crypto markets won’t regain half of the maximum capitalization, and Bitcoin will exceed $10,000. Bitcoin is currently struggling to keep more modest levels, only 4000, and does not strive for new local maximums.
Regulation: an element of uncertainty
The crypto-winter of 2018 made some positive for the crypto sector as a whole, unfortunately, "alpha-bulls" are reappearing on the market with Bitcoin forecasts at $250K and with claims of world domination, but most now understand that mainstream adoption will depend on regulation, which at least in words await the leading crypto investors - Winklevoss twins.
Venture billionaire Tim Draper believes that under the conditions of the crypto-sector development, governments can turn into a “slave unit”, however, in fact, as long as the Bitcoin price is estimated in US dollars, digital currencies will still remain a superstructure over the traditional monetary system.