- Bitcoin (BTC) is up 14.6 percent
- Cryptocurrencies have a role to play in investment portfolios
Despite skepticism, Bitcoin and cryptocurrencies are increasingly becoming part of investment portfolios. That’s notwithstanding their wild price fluctuations. At the time of writing, BTC is up 14.6 percent week-to-date.
Fundamentals
There are diverse opinions as far as what Bitcoin is. Generally, there is a consensus that BTC is first a medium of exchange and a settlement layer. However, its price volatility is bogging its progress toward its quest of being a global settlement layer. High net worth investors are particularly wary of this price instability.
Ultimately, the above-average rate of returns over the last decade is proving attractive, a bait. Even so, some analysts are cautious of Bitcoin, questioning whether the digital asset deserves a slot in modern-day investment portfolios.
Barry Silbert, who is the CEO of DCG Co, the parent company of Genesis Trading and CoinDesk quotes Matthew Bartolini. In his own right, Matthew is respected but is nonetheless critical of Bitcoin. Questioning Bitcoin, he says, “Cryptocurrencies have no role to play in investment portfolios.”
However, his view is against recent research findings from Yale University as well as a Twitter survey indicating that retail investors are pouring their life saving to cryptocurrencies and especially altcoins. Besides the high return on investment, cryptocurrencies like Bitcoin are useful as a diversifying asset. According to Mark Yusko, a renowned Wall Street Fund manager:
“Bitcoin is the best [portfolio] diversifying asset. It has a very low correlation and should be in everyone’s portfolio. Bitcoin is a better bet than stocks.”
Candlestick Arrangement
Currently, BTC bulls are in the driving seat, but their control is shaky. Because it is up 14.6 percent in the last week, there is a chance that prices will rally to $15,000. All the same, for this preview to be valid, then it is preferably that bulls first clear the June 2019 high.
Once prices surge past $14,000 with a distinctive break out candlestick that is not only wide-ranging but propped by high participation, bulls can freely buy the dips while aiming at $15,000. Before then, today’s indecision could spell doom for traders. Note that the lack of comprehensive reversal of June 26 losses exacerbated by shrinking volumes mean bears have an advantage from an effort versus result point of view.
Then again, the lack of a definitive trend in the last few days means prices may slump to $9,500 in a retest. If after that there is a recovery, odds are BTC will bounce back to $14,000 and later $15,000. On the other hand, losses below this support could see BTC slide to $7,500 and even to $5,500.
Technical Indicators
From above, June 27 candlestick is significant. Nonetheless, trend continuation depends on whether the break out bar has high trading volumes exceeding 82k of June 26. Any surge or meltdown above $14,000 or below $9,500 with high participation surpassing 82k will define BTC’s short to medium term price trajectory.
Chart courtesy of Trading View. Image Courtesy of Shutterstock
