Bitcoin is doing rather well as of late, but we cannot deny that the world’s number one digital currency by market cap has suffered a few setbacks in the past few days, such as falling from its recent high of $61,000 per unit down to the “measly” $58,000 it’s at during the time of writing. Don’t get us wrong – $58,000 isn’t necessarily bad, but it’s not where bitcoin was, and we’re eager for all-time high territory again. Well, according to Lennard Neo – head of research at Stack Funds in Singapore – this was just a simple correction, and the market is still as healthy as ever.
Neo: Corrections Like These Work for BTC
A recent interview with Neo is likely to cause several investors and traders to get the shakes when it comes to bitcoin’s future, though many are advised not to worry. He comments:
Bitcoin rose ten percent to break $60,000 but retreated almost immediately… We believe a healthy correction is in play as short-term traders put profits on the table after a good run from $45,000. The digital asset is now trading comfortably in an upward channel as we head into the final week of March.
To an extent, we’ve all seen this happen time and time again. Bitcoin reaches some whopping new price territory. People get excited and begin trading like mad, and analysts everywhere are convinced that the currency is going to continue its bullish ways until people have more money than they can spend.
However, we quickly forget that there are many individuals out there that are not in this scenario for the long haul. They’re happy with a few short-term gains here and there, and they are quick to trade in their earnings for cold, hard cash because that’s what makes them feel comfortable. There’s technically nothing wrong with this, and we all need to learn to respect this kind of behavior.
At the same time, it makes trading difficult for those who are looking to remain headfirst in bitcoin for a while, as short-term sales like these can potentially knock hundreds – maybe even thousands – off the price of bitcoin within the span of just a few days. This is exactly what occurred two weekends ago, and Neo is warning that the correction may not be entirely over.
There Are Many New Wallets Coming in Each Day
However, Neo did provide solace in the fact that so many new traders are getting involved in the crypto world, and the number of new wallets entering the blockchain arena is likely to outdo the negatives caused by short-term traders. He states:
The number of addresses holding one bitcoin and 0.1 bitcoin has a compounded annual growth rate of 21 percent and 12 percent respectively for the past five years. This was made even more significant, as during the years when bitcoin underperformed, we saw new investors continue to enter the ecosystem to accumulate the digital asset.