It looks like bitcoin is back on track… This is the sentiment shared by many analysts, who are warning investors that the time to panic has not yet arrived.
Is Bitcoin Back on Track?
Bitcoin has been through some tough times in 2022. The currency – which was trading for around $68,000 per unit last November – is now, just six seven months later, trading for around $30,000. This means the asset has lost more than half its value, but many analysts suggest that the currency is in the early stages of turning itself around, and there could be recovery waiting for all of us.
The idea amongst many of these analysts is that bitcoin is on the verge of bottoming out. While it could still potentially drop even more – and those drops could be drastic – these would arguably be the last before the currency began to show signs of recovery. Benjamin Cowen – host of “Into the Cryptoverse,” a popular crypto chart platform – explained in a recent interview:
So [the prices] we’re looking at right now, using logarithmic regressions and those types of models, we’re completely in line with that. We could go back to $15K and still be in line with that. If you look at prior moves and bitcoin bear markets, the pullbacks have been less severe each time. The first pullback was 94 percent. The second one was, I think, around 87 percent. The third one was 84 percent. So right now, from $69k to $25K, it’s a little over a 60 percent pullback. Now, if bitcoin were to go down more than 84 percent, then clearly the structure of the market is completely changing.
Jeffrey Ross – director at Vailshire Capital – explained that the currency could fall to as low as $20K in the coming months, but this would allegedly be a point in which investors could rush in, purchase more, and add a lot of BTC to their growing stashes. He said:
I look at things like the 200-week moving average that’s sitting at like $21,000 right now. Bitcoin in the past, when it’s gotten as bad as it can get, usually goes down and kisses that line. It can dip below, but then there would be tons of people, myself included, that would be backing up the truck to buy as much as possible, so I don’t think it would last very long.
People Still Seem to Love It
Ross also pointed to several factors – such as the continued adoption of crypto as a payment method – that would potentially aid bitcoin in its upward jumps in coming weeks. He commented:
According to Metcalfe’s Law, right, the value of a network is equal to the number of users squared. As the [bitcoin] adoption rate grows in a linear fashion, the price and the value of the network grows in an exponential fashion.