As many bitcoin maximalists believe that the first truly digital currency is poised to retest the $60,000 level again, lo and behold, in the light of the recent events, some other traders are beginning to doubt that especially that BTC price appears to be glued around $30k levels.
Several factors, including growing inflation, geopolitical crises, altering US monetary policy, and the Terra situation took its toll on the whole crypto market and it’s still a potential risk to the industry ecosystem, but unlike any other cryptocurrency Bitcoin has rooted fundamentals.
Until retail investor demand achieves its full potential of hundreds of billions of dollars, the supply/demand dynamic for BTC is still quite favorable and bursting with upward trends. So far in its brief existence, bitcoin has generated a significant amount of wealth. And I personally believe that it will continue to do so. But would I invest my entire life savings in bitcoin? No way. Would I put down a reasonable amount of money and trade? Absolutely!
Here are 3 reasons why I think that the bitcoin price will hit the $60k levels again.
- BTC Survived A Drop Worst than This and Made it to Tell the Tale
Many traders have witnessed the 2017 bitcoin meltdown. Back then, BTC dropped from $20k and decreased by nearly 65 percent in the months of January to February 2018. Following Bitcoin's crash, practically all other cryptocurrencies that had peaked between December 2017 and January 2018 followed suit. However, like what many of you might know, BTC made a dramatic comeback years later reaching its all time high at $60k.
- It’s All About Perspective!
When in doubt, zoom out. Bitcoin was roughly twice as valuable in January 2022 as it was in January 2021. Despite the fact that BTC has lost 40% of its value in the last 6 months, if you compare its price over a 5-year period, you’ll find that BTC has increased by over 1,300%, so BTC is still up!
- Number of BTC Whales on the Rise
Bitcoin's percentage of circulating supply has been unchanged for nearly a year, with 64% of all bitcoin has not moved in over a year from their wallets. That strongly suggests that crypto whales are taking the phrase “hold on for dear life” too much to heart, and accumulating more! The total number of Bitcoin tokens held by investors with more than a year's worth of ownership has surpassed 1.7 million BTC. This, according to reports, is a new high. Since December 2021, cryptocurrency investors, particularly BTC enthusiasts, have raised their holdings by about 20%. Several others are continuing to accumulate moderately and/or convert short-term holder supply into long-term holder supply. Regardless, seeing long-term hodlers not moving their supply is a favorable indicator.
If history repeated itself, accumulation on a larger scale was associated with late-stage bear markets, which were followed by supply constraints and the start of cyclical bull runs.
Lastly, don't let a price spike change your long-term investing strategy, just as you shouldn't let a price dip affect your decision to buy more BTC. Even more importantly, don't buy more crypto just because the price is going up! And remember, before investing any further hard-earned money in a speculative asset like Bitcoin, be sure you have all of your financial bases covered, from retirement accounts to emergency savings. Don't invest more than you afford to lose!
By Areej Salem
The views/opinions expressed in this article are those of the author and do not necessarily reflect the views and opinions of Al Bawaba Business or its affiliates
