Bitcoin’s price clawed its way up over the last week after crashing to a 4-month low earlier in June following reports that Korean-based Coinrail, one of the largest cryptocurrency exchanges had been hacked.
Prices rose as the crypto market responded, first to a SEC declaration that bitcoin is not subject to regulations and then came the news that New York’s Department of Financial Services had granted a cryptocurrency trading license to Square Cash, a popular mobile payments app.
This week, the price of the largest cryptocurrency by market capitalization has held at around $6,750 prompting some observers to predict that bitcoin’s worst days may finally over due to the apparent decrease in price volatility.
A leading financial expert however believes that a true recovery may still be some way off. Bill Baruch, the president of Blue Line Futures says the reduction or absence of market volatility may indeed provoke another round of bitcoin price crash.
Baruch, told CNBC that he expects the price of bitcoin to fall some more, in what he believes would be the beginning of a true bottoming process.
He explained that bitcoin’s rolling 30-day annualised volatility is down to around 61 percent compared to last year’s highs of nearly 150 percent.
“Ultimately, after its volatility has become this depressed and the cryptocurrency has lost as much as 70 percent from its December peak, I believe the selling has become exhausted, and a bottoming process can begin.
“The 100-week moving average is down near $4,550, so traders will be watching that level.”
Baruch however adds that a further fall in prices would ultimately lead to a recovery which would see bitcoin reach heights that could rival its December 2017 record high of nearly $20,000.
“I like to say that a bottom is a process, not a price. Now that the price and volatility have come back down to Earth, this bottoming process can begin. I see significant upside from here in the long-term.”
Many crypto watchers explain that the price volatility is largely due to market speculation and share the opinion that the price of bitcoin will go on to reach new record highs in the years ahead due to the global adoption of blockchain technology, a mainstream attitude towards the cryptocurrency and increased amounts of Initial Coin Offerings (ICO).