Bitcoin took a trip to hell and apparently made it back last night when a fall below $6,000 took many by surprise. Fortunately, Bitcoin formed a doji just above the support line which pumped back some life into the crypto currency and pushed it back above $6,200. The price currently trades at $6,223 with an oversold RSI on the daily chart. Bitcoin has also succeeded in forming a green candle right after the doji, which has convinced many market analysts that this correction might be over. This is the third time Bitcoin has tested the $5,800 level successfully, with its price still trading in a triangle but the chance of a break out increases with every passing day.
Bitcoin is about to finish the month of June at what has until now been the rock bottom for the year. If the cryptocurrency continues to hold the support line and enter the month of July with a price above $6,000, chances are the long term resistance line (shown in purple) will be broken and Bitcoin will begin the next rally, also kicking off the altcoin rally. This would most likely be triggered by some positive news that will bring in more buyers. Bitcoin volume is dwindling and the price keeps falling. This is usually a sign of market reversal and many professional investors are aware of this. Yet, no shrewd investor would want to catch a falling knife. So, there are plenty of bulls waiting to get into the market but they are not going to do that unless the signs of a reversal are clear.
Bitcoin holding the support level and recovering back is one bullish sign. However, for big money to flow into the market, this is not enough. Bitcoin also has to break past the resistance line to break above the triangle and begin a new bullish cycle. A growing concern among many institutional investors willing to get involved is that there are currently not enough investment vehicles to get into the market. Furthermore, there are not many solutions available for institutional money to protect against hacks, thefts and the like.
It also gives them an opportunity to bring the game to their own backyard. So, the chances of a Bitcoin ETF during late 2018 or 2019 are the highest. This could be the catalyst Bitcoin needs to push cryptocurrencies into the trillion dollars market cap. It also means that the price can be expected to shoot astronomically to $50,000 and higher if and when that happens. It may sound too easy to some investors to think that if they buy Bitcoin today their investment can grow 8 times or 10 times in the near future. However, what they do not realize is that it all comes down to risk/reward.
You could have bought Bitcoin back in 2015 for hundreds of dollars, but back then investors did not have enough options to safeguard their investments. You would have to put your Bitcoin on an exchange or put the codes on a USB, both of which can be hacked and have been hacked many a time as we have seen in the past. The investor that buys today has the option to save their Bitcoin on cold storage like on a Ledger or Trezor wallet, which is comparatively safer to what you would do back in 2015. However, it is still not near what institutional investors require. So, there is still a risk/reward advantage to be had if you are willing to take it. Once the market grows to a couple of trillion dollars in valuation, it will be too easy to get into the market and such gains will not be the norm.
