Confidence in Bitcoin is currently not very high. After reaching a record $20,000, it has since dropped in the face of increased regulation and cyber threats. The questions many investors are asking is where Bitcoin is heading for the rest of the year and beyond? Will it be able to reach the $20,000 price mark again? Or will Bitcoin finally enter a bubble? And most importantly - is it still a valuable investment?
In an article by the Independent, Investor Tom Draper -- known for backing Twitter and Skype during their early stages -- made a wild forecast in 2014 that Bitcoin's prices would rise from $300 to $10,000. His prediction came true, and it even went beyond his expectations. Now, he is claiming that Bitcoin will reach a 6-digit figure in 4 years' time.
"I'm thinking $250,000 a Bitcoin by 2022," said Draper. "Believe it, and it's going to happen. They're going to think you're crazy but believe it, and it is happening, it's going to be awesome."
Bitcoin's price as of this writing is at $6,504 -- a significantly lower price compared to the cryptocurrency's prices in December 2017. However, despite Bitcoin struggling to break the $7,000 barrier, there are signs that the digital fund may recover and attain its previous highs last year.
ONchain Capital's founder Ran Neu Ner talking to The Express believes that Bitcoin may reach $20,000 once again in 2018. He is basing his claim on the fact that Bitcoin's market is extremely volatile. He reminded investors that Bitcoin's prices could shoot up from thousands to tens of thousands in just a matter of weeks.
"If you recall a few months ago we were sitting right here, and Bitcoin was under $8,000", said Ner. "It shot up to $20,000 in less than two weeks, so this is nothing new.
Other investors agree, saying that Bitcoin's volatility will allow the cryptocurrency to reach new highs this year and in the near future.
"The crypto-markets are extremely volatile, and as an investor, you often have to look beyond the initial panic of a large price drop, not let emotions get in the way, and look at the long-term likelihood of a positive return," said influencer and cryptocurrency backer Oliver Isaacs in the same Express article.
A major factor that analysts have often cited as a reason for driving Bitcoin's prices is geopolitical turmoil. FXCM explains that trade tensions are enough to make investors turn to cryptocurrencies when macroeconomic factors are at play. Chris Burniske, an analyst who used to work for ARK Invest, was quoted by the Forex site saying that Bitcoin can be considered a digital version of gold due to the many qualities that the digital fund shares with the precious metal. "When you look at the global markets, there's lots of fear, uncertainty and doubts," and as with gold, investors are looking at Bitcoin as a possible safe haven asset.
Some analysts are confident that Bitcoin has already bottomed, which means that it will soon begin to rally. Chief Technical Strategist at Fundstrat Robert Sluymer believes that the international trade tensions, as well as the developing situation in Italy, are good reasons to jumpstart Bitcoin's recovery. He feels that once Bitcoin hits the bottom price of $7,000, the cryptocurrency's prices will shoot up.
"When we step back, we see the first phase starting to happen. We think Bitcoin is starting to bottom off some very key support around $7,000 and we think it's going to start a recovery process here," said Sluymer.
Sluymer mentions market indicators like the Relative Strength Index (RSI) as signs that Bitcoin is gaining some strength. Based on the chart below, Bitcoin's RSI is at 40. An RSI that is above 30 indicates oversold conditions, making now a perfect time to invest in Bitcoin for the long term.
image credit: Ethereum World News
Based on the current sentiments of investors, Bitcoin's prices may skyrocket due to several economic factors. If it's true that Bitcoin has bottomed, then the cryptocurrency has no other direction than up. It isn't clear, however, if Bitcoin will break its record highs late last year as the cryptocurrency market remains extremely volatile.