Bitcoin and the rest of the cryptocurrency markets have enjoyed a stellar run over the past few days. Additionally, the blockchain-powered social media network Steemit has witnessed its STEEM currency jump well past the $2 level. As President Trump might say, just what in the hell is going on?
Fundamentally, we are at the cusp of a major phase in the cryptocurrency markets — integration. For bitcoin in particular, we have passed the initiation cycle, and the mainstream has had quite a taste of its enormous, wealth-generating potential. But that doesn’t translate into longer-term, sustainable gains unless we have integration.
Japan and India are taking the first steps towards the legitimization of bitcoin, and crypotocurrency assets in general. Soon, these powerful nations will integrate bitcoin into their everyday lives. From there, other digital coins, such as ethereum, litecoin, and STEEM, will find an easier path towards their own respective legitimization.
Taken from a different angle, don’t get scared out of the digital markets. Indeed, we are watching financial history unfold before our very eyes!
Now, let’s take a look at what we can expect from the major cryptocurrencies:
On June 6, bitcoin briefly broke past the $2,900 level. Recall that my earlier target for bitcoin was $3,000, which may have seemed like a ridiculous forecast. Now, this metric doesn’t seem so far-fetched at all. It’s probably more likely than not that we hit it within three months time.
However, right now, we are seeing declining upside resistance. This means that subsequent rallies since June 6 has led to lower and lower highs.
This is likely nothing more than a consolidation pattern. Bitcoin must draw out the profit-takers and the weak-hands of the market before it can convincingly rise higher. Currently, it’s just shaking out these “dead weights.”
Once the bears are gone, look for my $3,000 target, and well beyond that.
Ethereum is one of the golden investments in the cryptocurrency markets. Over the long-term, I expect ethereum to hit $1,000 — similar to what happened to bitcoin just a few months ago.
Presently, ethereum is experiencing the same consolidation pattern as bitcoin. On June 6, it hit a high of $267 before correctly sharply. Subsequent rallies have resulted in lower peak values.
Ethereum may test support at $246, but I think momentum won’t allow it. Psychologically, the bulls are aiming for $300, and why not? It got fairly close a few days ago, and the energy in the cryptocurrency markets justify another run.
I personally consider litecoin to be the sleeper hit among the major digital currencies. Its longer-term chart appears to be forming a massive, bullish pennant formation. If so, I wouldn’t be surprised if this baby hits $60.
For now, we’re seeing the same, boring consolidation pattern as the other two cryptos, albeit with a little more downside magnitude. I wouldn’t get too hung up on this dynamic as it relates more to the law of small numbers (ie. small number increases result in large percentage gains, and vice versa).
So long as litecoin doesn’t dramatically break support at the low-$20s range, I think we’re fine. Also, as the lowest-priced cryptocurrency among the three on this list, litecoin represents a shrewd, contrarian investment.