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Could the Bitcoin price be consolidating in a maturing market?

by , 27 May 2014

Bitcoin has hit the headlines a lot over the past six to seven months. And over the period, the price of Bitcoin has been very volatile. The Bitcoin price reacted violently when news came out about it. But for the last month, the Bitcoin price has stabilised. With no scandals hitting the headlines, the digital currency is quite stable. Let's take a closer look at what this shows about Bitcoin…

The Bitcoin price has a trading range

Since 25 April, the Bitcoin price has traded between $420 and $460. This drop in the price volatility of Bitcoin is a display that the Bitcoin market is starting to mature, David Zeiler in US Money Morning explains.

This doesn’t mean there’s not going to be any volatility in the Bitcoin price going forward. It just means that there should be less severe reactions to news.

One of the major reasons why more stability should ensue is down to the lack of speculators now in the market. Most speculators are out of Bitcoin now. They were responsible for a lot of the volatility in the Bitcoin market.

Instead of speculators, many buy and hold investors are now turning to Bitcoin. And many people are buying Bitcoin to use at merchants accepting the digital currency.

A more stable Bitcoin price means more investors

If the price of Bitcoin continues to be relatively stable, this will attract more people to it. One of the main concerns many people have had with Bitcoin was the high risk attached to it. If the market matures, this attitude will change.

And not only that. If the Bitcoin price continues to stabilise, the price will start to gradually climb. This would be completely different to the surge we saw last year before the price came crashing down.

Time will tell if Bitcoin continues to stabilise. The longer it remains steady, the better it is for the future of Bitcoin.

So there you have it, why the Bitcoin price could be consolidating in a maturing market.

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Could the Bitcoin price be consolidating in a maturing market?
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