- February 8, 2019
- Posted by: Michael
- Category: Cryptocurrency trading
The following post is a guest post contribution. This post does not serve as investment advice.
Cryptocurrency investors are entering 2019 with tentative optimism. This is surprising given that the previous 12 months brought the worst bear market crypto has ever seen. After 2017 prices that saw Bitcoin in particular soar from under $1000 to nearly $20,000, hitting $19,783.06 on December 12, 2017, 2018 was a year of massive losses for those who bought near the top. However, after the blood-letting of the past year, new market movements have sparked hope that Bitcoin and other top cryptocurrencies have found their lows and will begin retracing toward previous values.
General market changes
Traditionally, an extended period of low yet stable prices indicates a market bottom. While the past several months certainly have been an extended period of low prices, this is not the only reason to believe that digital currency prices will improve in the coming months. Crypto is an ultra-volatile investment and one that traditional financial entities identify as high risk, inherently capable of anything from 1000 percent gains to dropping to zero. Investors must manage this level of uncertainty.
With the entire market shifting away from overvalued tokens with no foundational value, lacking real-world use case or functionality, existing platforms have been quietly advancing the core technology. These companies have presented some pretty exciting solutions, most of which are slated to launch in 2019. These use-case solutions will be what drives crypto’s predicted recovery this year.
Nevertheless, 2019 will still be a year of building support and stability. While many of these platforms have existed for years and appear to have a well-established infrastructure, cryptocurrency as a whole is moving toward the goal of these real-world use cases. Widespread adoption is the next major hurdle for the industry, and Bitcoin, Ethereum, and Ripple are all working hard to enable that future. Price changes will be a direct result of the success these platforms see in the next 11 months.
Bitcoin Price Prediction
Bitcoin, crypto’s firstborn and the unrivalled industry leader, is setting the pace this year, not just with price, but in the area of adoption as well. While BTC is not likely to exceed $6000 this year, the planned growth and capacity objectives related to Bitcoin ensure a period of price expansion. The Lightning Network is probably the most important Bitcoin optimization news. With promises of greater utility, transaction speed, and increased ease of exchange, Bitcoin Lightning Network is hopefully the answer to Bitcoin’s ongoing problems with everyday transaction adoption.
A quick glance at the Bitcoin chart shows that the coin is holding steady at the 200-week moving average support line just above $3,400. This number also represents the break-even point for Bitcoin miners. Given the support here, as well as transaction numbers and hash rate increases over the past month, Bitcoin seems to have found the bottom. Additionally, institutional investors are making real progress toward digital assets. This will mean increased investment ease and a continued push toward solution-based blockchain implementations.
With a stable bottom forming and excellent news in terms of fundamentals, the Bitcoin price should see a northerly climb over the year. However, given the fear that is already in the market because of last year, the growth will be muted, with the price not likely rising above $6,000 at a maximum.
Ethereum Price Prediction
The number two cryptocurrency by market capitalization, Ethereum continues to trade well below BTC, with current prices hovering just over $107 USD. ETH has been in a steady decline for several weeks now, with some analysts suggesting that the token will go below $100 before it shows any signs of recovery. The RSI is also trending downward at just 35. The last time the RSI hit this downward trend was at the beginning of November last year, when the coin tumbled to year-long lows around $85. This seems to indicate that ETH is still in a downward trend.
From a technology perspective, ETH currently offers more fundamental value than BTC, as it enables other coins and DApps to develop on its foundational structure. Additional potential factors in the price of ETH will include internal advancements. With billions of dollars pouring into platform optimizations, the possibility of payoff in the coming months is tremendous. ETH founder Vitalik Buterin has been teasing a switch from a PoW to a PoS consensus mechanism for quite a while now, and it looks like 2019 will be the year this happens, in the form of the Casper hard fork.
Casper will surely have an effect on ETH market capitalization, as it will vastly change certain aspects of the Ethereum network. Mining will potentially cease to exist, which would send current ETH miners and their hashing power to other networks. However, the cancellation of the Constantinople hard fork on Jan 16 has made much doubt that ETH is truly moving in the right direction. Taken together, the stability loss and essential role-based difference are indicative of potential opportunities for a muted ETH price recovery, with the potential to hit $300 in 2019. Traditional companies are also showing increased interest in Ethereum as an asset to their business platforms, which could serve to help push prices up in the long term.
XRP Price Prediction
Ripple is also likely to see growth in 2019, as it has shown the most interactivity with traditional financial institutions and is already building and optimizing hefty cross-border and remittance platforms in collaboration with over 200 major international banking names like American Express and Moneygram. XRP has seen general stability for a number of months now, and even with an RSI at 40, the trend is lateral, rather than down. Additionally, the 200-week MA has seen a flattening over the past 60 days, indicating a point of inflexion in the movement of the coin. Currently valued at $0.30, XRP could see increases of up to $1, given the signs of current stability.
However, the fact that the Ripple platform still holds a tremendous amount of the total XRP supply is problematic for its market performance. In other words, XRP is not nearly as far along as BTC or even ETH as a store of value and may struggle in the short term to go above $1 USD.
In conclusion, as cryptocurrency enters this time of building and development, investors may see a price recovery. As the industry continues to solidify these advancements, the value of top tokens will stabilize and increase in value, but in a much more organic and muted fashion. Upward momentum over the next year may be low, but long term investment potential for crypto is still high.