Bitcoin clung to the $6,500 late last week. Now, cryptocurrency bulls are hoping some favorable seasonality materializes for Bitcoin and other digital assets.
Traders expect Bitcoin, the largest digital currency by market value, to remain range-bound over the near-term. Among the myriad issues facing Bitcoin and other cryptocurrencies is adoption. As in when cryptos will become more widely accepted and used for mainstream activities, such as basic payments and money transfers, on a larger scale.
Data from the Element Digital Asset Management indicate that with 2014 aside, the fourth quarter of each year has been positive for Bitcoin, the largest digital currency by market value.
“Given that cryptocurrency markets are highly reliant on human sentiment and are rarely anchored to some sort of fundamental value, it’s not unreasonable to explore whether there is some sort of seasonality that exists,” wrote Element’s portfolio director, Thejas Nalval, and Kevin Lu, the firm’s director of quantitative research, reports MarketWatch.
Over the short-term, it is critical for Bitcoin’s fortunes that some positive sentiment emerges so that bullish traders have reasons to reenter the market.
Some market observers believe Bitcoin can rally into the end of the year, but there is a price area where that rally could stall, that being around the $8,500 area.
“Bitcoin permabull Tom Lee, managing partner at Fundstrat Global Advisors, is another one who believes he has found a cheat code for Bitcoin based off the changing temperatures. Using seasonalities of altcoins, or digital currencies other than Bitcoin, Lee argued the fourth-quarter will be where the HODLers can stop holding their breath,” according to MarketWatch.
Last week, reports surfaced that Morgan Stanley could offer Bitcoin swaps and derivatives trading for some clients.
For more information on the cryptocurrency market, visit the Bitcoin category.