The cryptocurrency market had a catastrophic time during 2018. It’s no secret. The bears took over since December 18th, 2017 and from that moment on, it’s all been about losing value. Bitcoin has lost about 80% of its value, and things have not been as bad for it as for many other digital assets which are at 10% of their maximum points.
So what should we be expecting for this year? Are the bears going to make our lives miserable for yet another year or could we be confident in a market recovery? What else could happen in 2019? We answer those questions in this article by giving you our top six crypto predictions for the year.
1. The bears will go away and the market will stabilize
We have reason to believe that the worse is over or that it will be over soon. We’ve hit rock bottom already, or we’re about to.
Bitcoin’s high point happened on December 17th, 2017 and it’s lost from 80% to 84% of that value (different exchanges report slightly different numbers). This is not unprecedented at all for crypto in general nor for Bitcoin in particular. These numbers are eerily reminiscent of the 2013/14 bear attack. We’re facing essentially the same situation in terms of more or less the same fraction of value lost in more or less the same time period.
Another feature in the current situation is how the price bounced off the 200 weekly moving average has bounced off. Again, if we take the previous bear markets as a guide, we’ve seen more or less the same phenomenon in the past. So we expect that the decline, and the weeks we’ve been experiencing the current market correction, seem to show that it’s basically the same as it’s been before.
Let’s not forget that we’re talking about a very young market that’s been around only for a decade (Forex, the stock market, the commodities market have centuries of history) so it hasn’t matured yet, so there’s a lot of noise and very little signal still. But time will bring maturity and, as that happens, the prices will be less erratic and market capitalizations will grow. Again, if we take history into account, BTC’s recent low tell us where we’re standing. Exactly in the expected trend for the number of days in the correction (410 days, to be precise, today we’re at day 398, so hell could be over in about roughly 12 days)
Perception in the market has also turned exceedingly bearish (to avoid saying utterly pessimistic). Six months ago the market was holding a support level of $6,000. At the time, most traders, holders, even several observers were expecting for a new and imminent bull run that would bring us record highs again. Failing that, at least a year’s end bull run would bring the price up to $10,000. You don’t need us to tell you how that went.
The current environment is quite the opposite. Some bears, believe it or not, arrived 13 months late to the BTC party and now they’re hoping it will go as far down as $1,000. That’s market psychology for you. The good thing about the current market sentiment is that it signals that we’re are, at last, near the end.
But let’s be clear about something. None of this means that the new big bull run is just around the corner. We don’t believe so. It’s more like 2019 will be a quiet year dominated by sidewise motions. There will be no great spikes but there won’t be any new catastrophes either.
If we, again, go by historical precedents by modeling our expectations on the last bear market, we’d find that bulls won’t come back for real until 2021 begins.
And that could be a good thing if you examine our next prediction.
2. Some digital currencies will reach and beat their all-time highs
In the early crypto days, Bitcoin was 90% of the market. For years, no new digital asset had any real use case to challenge Bitcoin at all.
But that was ten years ago and a few new tokens have appeared that have specific use cases aiming at tokenizing assets, guaranteeing security and privacy, sharing data, international transfers, micropayments, and many others.
That’s great news. It shows the market (and the technology) is coming of age. It is as pointless to have a crypto market that features a single coin for the most part as it would be to have a stock market that only sells Apple’s shares.
The crypto community has developed several coins tailored to cover the needs of some specific sectors thus enhancing the possibilities of authentic business use cases. And that will be the key for mass adoption which will create demand and limit the power of sheer speculation.
And let’s not forget the 2017/18 ICO craze. There were loads of new tokens and it’s really hard to tell some of them apart from scams. But forget about scams. New coins will need a competitive advantage to survive, and many of them just don’t have any so they will struggle to deliver any real value, let alone market value. And those are the projects that won’t recover. Some of them could even disappear.
The market will start embracing real projects that have some future in terms of both usefulness and compliance with regulations. This will favor coins that had no ICO.
3. We like Ubiq for the year
While so many new projects have spent so much time doing flashy marketing for their ICOs while delivering nothing in terms of results, the Ubiqu team has been working really hard updating their hashing protocol from Ethash to Ubqhash. This is meant to prevent 51% attacks. They’ve also been improving key pieces in their infrastructure and fighting hard to make Ubiq a real candidate for the most stable enterprise platform that businesses are slowly adopting as you read this.
The UBQ/BTC trading pair is at its lowest (from 6,000 to 8,000 Satoshi). That along with the fact that the decline is set against higher lows on the 24-hour timeframe against the MACD is an indicator that the price is ready to start moving up now.
Ubiq’s first problem will be to surmount it’s 200 daily moving average, which is at 9,500 Satoshi. Then will come the resistance levels which are many. We believe that the final price will beat its previous peak of 9,500 Satoshi. Ubiq will beat the market this year.
4. Regulators will make some rather well known ICOs give the money back
Regulatory authorities have left crypto alone for the most part. But ICOs have caught their eye and they’ve noticed the ICO explosion that began in 2017. SEC has been rather clear about their position regarding ICOs (unlike Bitcoin, they’re securities) and it’s now threatening to do something about them.
The thing is that the ICO craze is unlikely to stop until an example is made out of somebody.
Keep in mind that the SEC does not mess around. It fined DH Khalid and Floyd Mayweather Jr recently for promoting digital assets based on ICOs. There’s a good chance that they chose such targets because, being celebrities, they’re very visible. We would expect SEC to order some big ICOs to give investors their money back.
Yes, the ICO apocalypse could be coming. But not to worry. Many big blockchain projects never held an ICO so they will be safe (Bitcoin, Ethereum, Ubiq, just to name a few). And even among the ones that had ICOs, some were launched fairly through Proof-of-Work.
5. Ethereum adopts Proof-of-Stake
Vitalik Buterin (Ethereum’s founder and current leader) is quite vocal about the things he dislikes. And he’s not crazy about Proof-of-Work, to say the least.
While we could argue against a protocol based solely on Proof-of-Stake, the writing is in the wall already. Ethereum will adopt it as soon as in possibly can implement it. Ethereum’s network’s general update or hard fork (called “Constantinople”) was scheduled for January 16th (then, it was delayed) and it will reduce block rewards for miners. Miners are already not so happy because the market remains bearish, Ethereum’s token has lost capitalization, and the gas prices remain high.
Our take on this is that Ethereum will issue at least another hard fork before next year and that it will include PoS. The effect the move will have on ETH is anybody’s guess. But we think that some ETC20 tokens are poised to do better than ETH anyway.
It seems reasonable to assume that a lot of miners will leave Ethereum and will lend their hash power to some other blockchain. And that blockchain could be Ubiq, which has deployed a new hard fork of its own recently. So it could be just in the right place to seize that chance with their new hashing algorithm, Ubqhash, which improves security against 51% attacks. It would be a natural destination for disappointed Ethereum miners.
Which takes us to our fifth and last prediction.
6. We’ll see more 51% attacks on “Shared Hashing Algorithm” coins
Ethereum’s switch to PoS will free up a lot of hashing power. That, in turn, will make coin attacks cheaper, especially the ones that use shared algorithms.
That’s why it makes sense to think that 51% will increase. The coins that can deal with this kind of attack will be better investments and will have a better chance to perform better in the market.
Also, coins with independent hashing protocols (and this is where Ubiq comes up again) will also do better because their hashing gives them improved security.
[Image courtesy of pxhere]
Disclaimer: All information provided through this article should not be regarded as investment advice, nor should be taken for granted for crypto trading purposes. Before making any investment or trading plans, make sure to inquire about the information diligently by carrying out your very own research. Thank you.