How Much Lower Can the Bitcoin Go?

If you’ve been keeping tabs on the digital currencies, you’d know that the bitcoin has gotten clobbered in 2014 but seems to be in recovery mode so far this year. As you can see from the chart below, BTC dipped to $150 in mid-January then broke above a short-term triangle pattern earlier this month, suggesting that more price gains could be in the cards.

BTC/USD Daily Chart

BTC/USD Daily Chart

However, looking further back shows that the longer-term downtrend is still very much intact, with price still trading below a descending trend line since June last year. If the $300 mark holds as resistance, the bitcoin’s value could continue to fall in the coming months.

However, bitcoin enthusiasts insist that the digital currency is still massively undervalued right now and that the fair price should be around $518.59. If more traders share this view and take advantage of current bargain prices, the bitcoin could regain a lot of lost ground. In fact, several positive developments in the past few weeks have allowed the bitcoin to trade close to its 5-week high.

More and more companies have been adopting bitcoin for their online payments systems, with nearly 100,000 merchants benefitting from faster transactions and larger market reach in accepting bitcoin payments. According to itBit’s head of business development Antony Lewis, the use of the cryptocurrency has allowed several companies to save millions of dollars in credit card transaction fees and eliminate fraud and chargebacks.

Apart from that, news that the company Bitcoin Investment Trust (BIT) has been approved for public trading on OTC markets led to speculations that the digital currency might soon be traded on regulated exchanges. Analysts say that this could be a game-changer for the industry – one that might actually allow the bitcoin to keep climbing from here.

Any bitcoin traders out here? What’s your take on this digital currency? As always, I’d love to see your feedback in our comments section!

 

 

  • ForExchange

    Hi Ninja,

    I have never traded bitcoin but you got my attention to it.

    What I do not agree is though what “bitcoin enthusiasts” say about over and undervalued bitcion and its price should be $518. If it is not the price currently then that means at this moment there is just not enough demand to push it at that level. It might change but there is no such thing what price should be. There is price action and trend but no certain price.

    One more thing, not related to your post: why is there a change once more in the comment section? There is in every couple of month a change between Babypips comment box and Disqus. Just interested what is going on.

    Thanks for the nice article,

    FE

  • Thanks for checking out my blog and for sharing your thoughts!