Published: 22 December 2020 by Andrew
Making a good Bitcoin Forecast can be the key to investing in this cryptocurrency profitably. But is it really possible to understand precisely which direction the cryptocurrency price will take in the coming years?
In reality, this is not a simple operation. Fortunately, there are indicators and techniques that allow you to make predictions with an excellent margin of success, just understand how Bitcoin works.
Throughout this guide, we show the best ways to make forecast on Bitcoin and also talk about the future of the price of the most important virtual currency in the world.
For all those who are curious about Bitcoin forecast because they would like to invest in the coin, we will also talk about the best ways to do it through modern online trading brokers such as eToro.
We are introducing eToro also for another reason: it is the only broker that makes Bitcoin forecast almost useless for those who want to invest. This is because it offers an automatic copying system of market operations on cryptocurrencies and any other asset.
But before talking about eToro’s Copy Trading, let’s also deal with the discourse on the two main types of analysis that allow us to understand the next Bitcoin price movements: Technical and Fundamental analysis.
- Technical Analysis is the process of analyzing the past of the price on a graph that represents its trend. These are reliable and effective analyzes especially for trading on the medium and short term and allow you to receive very often effective trading signals.
- Fundamental Analysis, on the other hand, has very little to do with charts. It is the study of all the internal and external factors that influence the market value of an asset, a security or even a cryptocurrency. Knowing the factors that impact the performance of an asset is an excellent way to make predictions on them.
Bitcoin Forecast and Investment
The most obvious purpose of an asset price forecast is to make an investment. True and accurate forecasts lead to profit with equal precision.
Bitcoin is an asset like any other. Its price fluctuates continuously due to the market and many other surrounding factors, so the goal of many entrepreneurs is to buy when the price is low and resell when the value rises.
This is the most common strategy, but are we sure it’s the best? Difficult to say, also because what matters most is not establishing the best strategy, but simply earning from your investments.
Few people know that to do this there are online trading platforms that allow you to profit from the market fluctuations of an asset not only when its price increases, but also when it falls on the market.
On these platforms it also takes advantage of price drops, thanks to the mechanism of short selling. This is a very advantageous speculative operation that makes money even when the value of a cryptocurrency falls.
Those who invest in cryptocurrencies with methods other than online trading do pure and simple trading, so they are more exposed to losses. This happens every time the price of a coin falls compared to the value at the time of purchase.
Those who are able to make the right forecasts and enter the market at the right time, in the trading sector, can always and in any case earn.
Notes on Bitcoin
But why does everyone want to invest in Bitcoin? What is so special about this digital currency? For all the major analysts, in the last 50 years, nothing like this had ever been seen. Bitcoin is considered the deal of the century by all categories of investors.
Back in 2009, when no one knew about the currency and sensed its potential, some users began to accumulate Bitcoin in virtual wallets on their computers.
At that moment, many did it out of curiosity rather than the intuition of an opportunity not to be missed. Bitcoin was still worth a few cents of a dollar and for this reason it did not arouse much interest in investors.
Eight years later, when the value of Bitcoin reached nearly $ 20,000 per coin, not a few investors who had heard of Bitcoin in the past felt a tremendous sense of regret.
If a single coin is worth $ 20,000, what happened to those who owned hundreds of them? Within a month those people became millionaires, yes because the value of Bitcoins has grown dramatically in a very short period of time.
But is it possible to predict such a thing? When will such an explosion in the price of the asset happen again? It’s not easy to say, but some methods can be used to get close to a pretty accurate forecast.
Technical Analysis for Bitcoin Forecast
An excellent method for investing in Bitcoin is to use the tools of technical analysis of the financial markets. This discipline has always existed and has been in use long before cryptocurrencies were even invented.
Technical analysis consists in the study of the price charts of any asset, precisely in order to make predictions on future market movements. Obviously, this is not a foolproof method, but statistically it manages to give important results.
Price charts, what exactly are they? They represent the history of the trend of a price on a market. They are the graphic representation of the fluctuations undergone by the price during trading.
The price trend, in fact, is an expression of everything that concerns a certain market:
- The decisions of buyers and sellers
- Political and economic decisions
- The factors and internal characteristics of an asset
- The psychology of the market
- News concerning an asset or one directly connected
What you see above is the classic Japanese candlestick representation of a price chart. Bitcoin has one of this type and is the best for trading online.
As you can see, the candles have a red or green color. The red ones are used to indicate a fall in the market price, the green ones a rise.
The graph, in simple terms, shows the past of the price, but using some analysis tools on it it is possible to predict its future with good approximation.
Read also: Make Money with Bitcoin.
Tools to analyse Bitcoin Forecast
How is technical analysis done? Simple, through the technical indicators. On the charts of the best trading platforms, like the eToro one, there are many useful tools to understand what the condition of the market is and the decisions to be made in the future.
Most of all, indicators are very useful for one purpose: identifying the ideal time to enter the market with a good chance of success.
Ultimately, technical analysis serves precisely this purpose, to obtain reliable trading signals and thus maximize profits during the negotiation phase. If you did not operate according to the technical dictates then earning in online trading would remain just a dream.
And what are the best technical indicators for trading Bitcoin? There are 3 certainly very effective and they are good both for investing in cryptocurrencies and for any other kind of financial asset.
Here’s what they are:
We briefly illustrate how they work:
The Moving Average is a curvy line to be displayed on the price chart. It offers market signals when it intersects with the chart indicating the appropriate time to buy or sell an asset
The RSI, on the other hand, is an indicator that is used to recognize when the rise or fall of the market price is excessive. Recognizing this condition is essential especially on a volatile asset such as Bitcoin.
Finally, Pivot Points are an excellent indicator because they allow you to recognize the “pivotal points” of the market, areas where supports and resistances are created which are very useful to understand when it is convenient to enter the market with a trade.
Bitcoin Forecast with Fundamental Analysis
On the same level as technical analysis, we can place fundamental analysis at the level of importance. It represents the study of all internal and external factors that can influence the price of Bitcoin and any market reactions.
Let’s take some examples of what is a true fundamental analysis on Bitcoin:
- Politics: Bitcoins are an independent and decentralized currency, which means that in some ways they are also a political and anti-systemic tool. The direct consequence is that the political decisions of governments and parties can influence the price of the cryptocurrency. If an important nation like the United States, for example, were to prohibit the use of Bitcoins on its territory, the price of the cryptocurrency would certainly suffer.
- Economy: the price of Bitcoins can have a direct and indirect correlation with the trend of the global economy. Right now, Bitcoins are seen a bit like gold, that is, they are a safe haven asset and this is precisely because they are disconnected from the circuits of the traditional economy. When there is a crisis in the real world, Bitcoins grow in value.
- Intrinsic Value: The value of Bitcoins also depends on their own internal characteristics. The Bitcoin system provides for a scarcity mechanism, for which, once 21 million coins are in circulation, Bitcoin will no longer be released. This is a mechanism that helps to increase the value of the currency over time, a bit like what happens with the scarcity of gold.
Bitcoin Forecast? Better eToro
As you understood in the course of our guide, there are many ways to predict the future value of Bitcoins. However, learning how to do the proposed analyzes can take time, but above all there is uncertainty.
Unless you are a seasoned investor who knows the trading and cryptocurrency industries well, it is difficult to start making serious money in the industry before a 3 – 5 year period.
So what is the solution? In fact, having to wait all this time to see profits can get frustrating and push you to look at other forms of investing. Fortunately, there are brokers who have the right solution for you.
eToro is the first intermediary of financial products in Europe and among the first in the world. Its online trading services allow traders to break free from the bondage of in-depth analysis and forecasting by letting others invest their capital for them.
You know what coaches do to make athletes grow? They tell him to find a mentor, someone to imitate and emulate in order to become equally great.
eToro is the broker who had a similar intuition, but in the field of online trading and not in that of athletics. Several professionals operate on its trading platform and so eToro has decided to launch the Popular Investor program.
Any professional investor can become “popular” and make money to have his own trades copied to other users in real time. This means no longer having to do market analysis and Bitcoin forecasts. You can make money by copying what the professionals do automatically.
Copy the best professionals who trade Bitcoins, click here.
Thanks to its unique and exclusive services in the sector, eToro is the best broker for beginners who wish to exploit the enormous potential of Bitcoin by investing their savings in this cryptocurrency.
Of course, the Copy Trading system is not risk-free. It is very important to choose the best traders well by studying the operations they have made in the past to understand if they have earned or not.
Equally important is not to stop at the copy of a single investor, but to choose 4 or 5 high-level ones in order to differentiate your trading portfolio with operators who apply different choices.
A great advantage of this system is that it allows you to assimilate and learn the techniques of copied traders, interpreting their decisions and seeing the type of analysis they have done on the market before starting their trades.
Read more: Investing in Cryptocurrencies.
As an asset, Bitcoin is not discussed. No Forex currency or stock market asset can compare to cryptocurrencies for profit opportunities.
That said, it should not be forgotten that the higher the profit potential, the greater the risks. Your capital can be jeopardized when trading highly volatile assets such as Bitcoin.
Warning: we are not discouraging cryptocurrency trading, quite the contrary.
It will be the prudence of those who invest to have to safeguard the capital from huge and unsustainable losses. The risks derive above all from the fact that volatile assets such as Bitcoin are often unpredictable, but by choosing the proposed Copy Trading solution, then the anxiety of having made a mistake in doing the analysis is less due to the certainty (hopefully) of having chosen a good professional to copy.
Given that a forecast always has a margin of error, the eToro Community made up of thousands of expert traders is the best way to ask for information about the future trend of Bitcoin.
Yes and the most reliable (statistically!) Are the free trading signals offered by ForexTB.
Currently the target to be reached is equal to $ 20,000, which was close to in January. The coronavirus has slowed down the plans, however the Target Price remains the same.
Yes, thanks to the eToro Copy Trading system. The best traders are chosen and their operations are copied.