Last week, bitcoin dropped from near $20,000 to a low of below $12,000. The massive sell-off was unexpected leading to some in Wall Street to call it Armageddon.
On Christmas Eve, it started to rise and as of this article, it is trading at above $16,000.
Yesterday, reports from Israel indicated that the country was about to ban listed companies dealing with bitcoin.
Also, a Morgan Stanley report stated that bitcoin could be worth zero. According to them, bitcoin retained no value if retailers and other sellers failed to accept it.
They forgot one thing. Bitcoin might continue to do well even if no retailer accepted it. This is because of the large market that exists in the dark areas of the internet. In addition, considering that cybercrime is on the rise, bitcoin might continue to soar as criminals seek ransom in form of bitcoin. Other heavily sanctioned countries like North Korea could use bitcoin to do business without the dollar.
As shown above, bitcoin’s ADX is currently at 34, an indication that a new bullish trend is forming. This is further enhanced by the upward moving – narrow Bollinger bands.
For sure, no one knows what the future holds for bitcoin and other cryptocurrencies. However, in the meantime, traders may be skeptical on any moves to short the currencies. Instead, perhaps remaining biased towards buying the dips.