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Why does technical analysis work for Bitcoin?

Bitcoin Forecast 2019: A critical year for cryptos

Two thousand eighteen will be the year that will remain in the memory of all traders that were expelled out of the Crypto market. From the last rallies of the great December Bump to today, bears have overwhelmingly dominated the market. This year 2019 is going to be an essential one for Bitcoin without no doubt. After more than ten months of continuous falls, the next twelve months will be decisive for the long-term future of Bitcoin.

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Bitcoin Forecast 2019: A critical year for cryptos

The United States Economy and Politics in 2019: The return to a bipolar world

The European Union Economy and Politics in 2019: Conflict at home

China and International Trade in 2019: The crossroads of a great power

Bitcoin is the universal payment system originally launched as an open-source software in 2009 by the person or group of people known as Satoshi Nakamoto. Unlike the classic banking models, Bitcoin has qualities such as anonymity or decentralization thanks to the blockchain technology that is used to validate the transactions. Due to these characteristics, user interest in this digital currency has been increasing, which has generated an enormous volume of cryptocurrencies being issued to the market following the Bitcoin pattern.

Currently, the Bitcoin is the cryptocurrency that has the biggest nominal market price and the largest market capitalization. Its importance is such that it is considered unique, treating the rest of digital currencies as Alternative Coins (altcoins). In this group, we can find open source systems such asEthereum,RippleorLitecoin.

There are many factors that condition the highvolatility of Bitcoins price. Similarly to what happens with common assets and the currency pairs in the foreign exchange market, the increasing or decreasing interest of the public raises and/or lowers itsmarket price. However, it also has certain specificities such as the absence of current regulation or pressure from governments. This keeps its value in constant movement, that the individual investor should frequently confront with the Bitcoin technical analysis.

The individual investor should differentiate the anonymity of the cryptocurrencies with the fact that transaction processes are recorded and validated using the Blockchain technology. Otherwise, the Bitcoins pass-through information would not be available. However, the process of performing this data recording requires a high computational work, as well as a lot of time.

To do the mining, individual processes are carried by the users, who are responsible for recording that information in blocks, which will join the unchanging blockchain. On the other hand, as a reward, the miners will obtain for their collaboration a small number of bitcoins in the process known asBitcoin mining. Likewise, this term also applies to the creation and distribution of Bitcoin. According to the latest Bitcoin News, the total number of Bitcoin mined is about the half of the total number of Bitcoin created during the previous year. Such diminishing number of newly mined Bitcoin means that the total number of 21 million Bitcoins in circulation will only be created by 2030.

The prices of cryptocurrencies change quite rapidly and can be wild. With high attention and trading volumes, patterns are emerging

Trading cryptocurrencies can be wild, but sometimes too wild. Traders of Bitcoin, Ethereum, Ripple, Bitcoin Cash, Litecoin, and all the restneed volatility

The fast-moving world of cryptocurrencies allows quite a few opportunities for traders. New cryptocurrencies and tokens often rise at a rapid clip

The introduction ofBitcoin futureson regulated trading venues was regarded as a significant milestone in bringing the digital currency closer to mainstream investing. While some skeptics still believe that crypto assets are too risky and speculative for long-term investment purposes, crypto enthusiasts hope that futures trading would bring institutional money to the industry. Lets have a closer look at what is a Bitcoin futures contract and how to capitalize on it.

In essence, Bitcoin futures represent an agreement to sell or buy a certain amount of an asset on a particular day at a price that was fixed beforehand, and to that extent, they are no different from any other derivative financial instrument of the kind, be it futures for corn, oil or soybeans. Companies and businesses buy futures to fix the price for a specific time period, which gives them the luxury of price stability even on volatile markets, while investors often use futures for hedging risks or speculations as the value of the futures contracts is based on the overall performance of an underlying asset.

In December 2017, two Chicago exchanges – CME and CBOE – launched Bitcoin futures trading, and thus unlocked the cryptocurrency market for institutional investors. The exchanges guarantee that the parties of the futures contract fulfill their respective obligations based on the applicable legislation. It means that the market players that were discouraged by an unregulated stance of the digital asset got a handy tool to gain exposure or hedge Bitcoin and benefit from the price fluctuations.

Bitcoin Walletsare private systems where individual investors store their Bitcoin mined or obtained through transaction or sale of services. According to their characteristics, theBitcoin Walletsare classified into 4 different models:

One of the most commonly used options due to the speed at which it operates. This means a web hosting from where investors carry out all their transactions.

For desktop wallet, investors must download a special application to their computers or mobile phones. Certain operations, such as balance inquiry, do not require an internet connection.

One of the safest options to hold the Bitcoin wallet is the hardware. They work as physical external hard drives where investors store information about the total balance in a very reliable way.

Along with the hardware wallets, the safest option. However, its process is slower requiring its passage through the online Wallet.

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