No FOMO: Bitcoin Price Under Pressure as Bullish Optimism Fades
Bitcoin continued lower on Friday, capping off a mediocre stretch of trading that has threatened to undermine the latest rally attempt. The digital currency remains well off yearly highs but has seen a sharp drop in momentum since Christmas.
The bitcoin price traded in the low $3,600 region on most major exchanges Friday. At the time of writing, the price range was $3,616-$3,620. On Bitfinex, bitcoin enjoyed a $130 premium as prices hovered in the mid-$3,750 region.
Aggregate data courtesy of CoinMarketCap show an average price-per-coin of $3,674, down 3.2% on the day. Since catapulting north of $4,300 at the start of the week, bitcoin finds itself unable to replicate its pre-holiday surge.
The downtrend, which has occurred in at least two legs, has triggered a brisk selloff in the altcoin universe. The cryptocurrency market cap is now valued at $122 billion, down from a recent high of $147 billion.
Trading in bitcoin and other virtual currencies has steadily declined throughout the week. Bitcoin trades were worth $4.9 billion on digital currency exchanges. Total market turnover reached $15.4 billion.
Bitcoin faces several major resistances before a trend reversal can be confirmed. The first major inflection point comes near $4,000, followed by $4,500. Eventually, bitcoin must clear $5,400 before miners affected by the downtrend return.
No FOMO Yet
It was only last week that bitcoin was showing compelling signs of a major recovery. The leading digital currency surged $1,300 in a little more than a week as trade volumes climbed substantially. When this occurs, some market participants are overtaken by a ‘fear of missing out,’ or FOMO. However, analysts like Anthony Pompliano believe there’s still plenty of time to lock-in at ultra-low prices. In other words, you’re not missing out on anything yet.
In a recent interview with CNBC, Pompliano said bitcoin will likely breach the $3,000 floor at some point in the near future, signaling continued headwinds for the largest cryptocurrency This will no doubt create a gravitational pull on the broader market, potentially dragging altcoins and tokens to new lows. Of course, short-term trends shouldn’t be mistaken for a long-term value assessment of the asset class as Pompliano is overwhelmingly bullish on bitcoin’s future.
Hacked speculated last Friday that, despite the recent bout of good fortune, the path of least resistance for bitcoin could be lower as we head into next year. However, this could quickly change amid positive news flow tied to institutional investment and business adoption. In either case, 2019 could mark a paradigm shift in the cryptocurrency market following two years of dramatic swings.
Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
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