Bitcoin Finally Breaks Out… But To The Downside

Bitcoin’s Trading Action

The price of Bitcoin has remained steady for quite some time now because it has continued to trade within a fairly predictable sideways trading range between around $5900 and $6800.

I think it is fair to say that many people, particularly those people who have purchased some Bitcoins as a long-term investment, expected the price to eventually break upwards out of this trading range when the breakout finally happened.

Therefore I think many will have been shocked to see the price drop sharply downwards yesterday. The price hit a new low for 2018 of $5304, according to my IG chart, but has since recovered slightly to $5555 at the time of writing. However it is still well below the previous trading range, as you can see below:

Cryptocurrency Sell-Off

It is not just Bitcoin that has experienced heavy price falls either because all of the other major cryptos have dropped sharply.

Bitcoin Cash experienced the biggest falls, but cryptos such as Ethereum, Litecoin and Ripple were also affected.

The question is; is this the end for cryptocurrencies, or this just a temporary set-back?

Future of Cryptocurrencies

The reality is that no-one really knows. I personally have never purchased any cryptocurrencies or traded them long or short, and don’t really intend to either because to me it is just gambling.

Yes these assets could well be the future and the price could easily move dramatically higher in the future, but they could just as easily become completely worthless in a few years.

Some of the most well-known cryptos may not be around in a few years time, and there may end up being one or two dominant ones that make all the other ones practically worthless. Indeed the biggest cryptos in 2020 in beyond may not even have been invented yet.

As I say, there is just too much uncertainty to trade these assets with any real confidence, but at least now we have finally seen a breakout on Bitcoin, even it is a negative breakout. This should create some decent trading opportunities for those traders who like to trade these assets on a short or medium-term basis.