Traders and analysts have been trying to figure out the critical bitcoin price drivers over the last couple of years. Some are blaming speculations and traders’ expectations for the movement in price while others are viewing fundamentals aspects for the volatility.
The majority of market participants accuse bitcoin cash hard fork and SEC for the latest selloff in cryptocurrency markets. Mati Greenspan, however, has a different opinion; he believes technical factors are creating the price movement rather than fundamental elements and traders speculations.
Technical Factors Responsible for Bitcoin Price Movement
Bitcoin price fell 40% last month from $6500 to $3500. The rest of the cryptocurrency market has also followed a similar trend. The total cryptocurrency market capitalization collapsed from $200 billion at the beginning of last month $120 billion on November 25.
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Mati Greenspan claims technical factors exclusively drive the price movement. Technical factors always play a crucial role in presenting the true outlook of assets and securities.
Explaining the stance, he said, “Price action has a way of perpetuating, and fear starts building up, and then people say, it’s because of the Bitcoin Cash hard fork, it’s because of the SEC, it’s because of Tether. All of those stories add to the fear. But really, what we’re seeing is a simple technical breakout to the downside and not a break of the crypto industry, which is very strong at the moment.”
But it’s the Time to Buy
The eToro analyst is bullish about the long-term performance of digital coins. He is optimistic that crypto coins adoption would increase at massive pace in the coming years; Mati Greenspan says institutional investors have started pouring their money in cryptocurrency markets after the huge selloff in prices.
“Bitcoin has gone through various boom and bust cycles in its short history and a lot of the time we see bull cycles where we see the market going up by a 1,000%, 10,000% in a single year or even within a few months. And then after that type of growth, you generally need to see a pullback,” he added.
The reports have also been showing that institutional investors are buying cryptocurrencies through OTC markets. According to the Bloomberg report, institutional investors have replaced retail investors as biggest buyers.
Echoing Bloomberg report, Jake Chervinsky, a securities litigation attorney at Kobre & Kim, has made interesting comments about the panic among retail investors. He said “Investors, with bitcoin trading under $4,000: Retail: ‘should I sell and buy back lower? Should I open a short? Should I give up? Is it going to zero? was this whole crypto thing a scam after all?’ Institutions: ‘please keep selling us cheap bitcoin. thank you.’”
The entrance of prominent exchanges and financial institutions in cryptocurrency markets added to institutional investor’s confidence. Bakkt, the subsidiary of Intercontinental Exchange, announced to launch bitcoin future contracts from next month while Fidelity and Goldman Sachs are also offering trading and custody services to big investors.
