Don't try to predict BTC price moves, says Forbes article

13 Jun, 2019
by David Robb
Analysis
Don't try to predict BTC price moves, says Forbes article

A recent article in Forbes has pointed out the difficulty of calling the next move for Bitcoin's price. It draws on research from a number of places to show that existing price discovery mechanisms are not sufficient to predict BTC moves.

The article, by financial writer Billy Bamborough, drew on research from data provider Indexica. According to Zak Selbert, chief executive of Indexica, "We tested Bitcoin and other major cryptocurrencies including ethereum and bitcoin cash in the same way we've tested popular stocks and traditional currencies. From our extensive research, and we've done more testing around Bitcoin and cryptocurrencies than we have for pretty much any other asset we've analyzed, it simply appears the Bitcoin price and crypto markets just don't respond as we would expect them to."

As crypto is a relatively new asset class, price discovery is still in its infancy, which explains why there is such a wide range of different analyses of how BTC's price movements will play out, in the short-term as well as the long-term. Recent months have seen extreme volatility return to BTC, with the price variance increasing on a monthly basis.

The general uptrend is bringing a new level of optimism, which is leading to a broad spectrum of different scenarios being envisaged. Some see an ATH price around the corner, while others expect a slower climb or even a huge retracement. There isn't even a strong consensus in the crypto community as to whether we are currently in a bearish or bullish cycle.

Although the impact of external factors is still hard to predict, technical analysis can still be effective. The Forbes article quotes Mati Greenspan: "What does work well for crypto analysts are simple technical analysis tools like support and resistance points, especially psychological barriers, as well as sentiment, trend, and above all momentum indicators."

Indexica's research does show that BTC is maturing in terms of industry sentiment. Recent months have seen an increase in forward-looking statements and discussion of future developments, as opposed to reflections on the Bitcoin heyday of late 2017.

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