17.01.2022 – Is this the end of the crypto selloff? Some experts believe just that. In fact, BTC has dipped down to around $40,000 to stage a recovery. The fact is that the largest cryptocurrency is trading below both the 50-day and 100-day lines. Let’s shed light on the arguments of BTC bulls today. One of them sees current purchases as “failsafe” – fail-safe, absolutely reliable.
The market explains the sharp drop in Bitcoin prices since November mainly with the Federal Reserve’s plans to tighten. After the biggest crash since May 2021, with losses of around 40 percent, the price is as oversold as it was last in the Covid crash – “traditionally a failsafe bullish indicator,” judged the blog ZeroHedge. Some traders saw the 40,000 as a floor. According to Noelle Acheson of Genesis Global Trading, there is some upside potential now. For example, she said, demand for put options in BTC has plummeted, while demand for call options is on the rise. Mega bull Mike McGlone of Bloomberg Intelligence sees a price target of $100,000.
Marcel Kasumovich, Head of Research at One River Asset Management believes in a fundamental re-rating in cryptos. One River states that we are in an early phase of the digitization of finance, marked by uncertainty. And it is precisely now that it pays to add cryptos to the portfolio. After all, “Investors focused on macro narratives have mattered more than leveraged traders.”
Specifically, One River cited the Lightning Network. This system was introduced in 2015 by independent programmers from the blockchain world to process smaller payments. One problem for everyday use was its slow pace. But the network can now process billions of transactions in a second, according to One River. And payment providers like Bottlepay are accepted by the Financial Conduct Authority in the U.K. – meeting a key money laundering test, it said. According to One River’s pricing model, BTC would need to be priced at $50-60,000.
Fidelity Digital Assets stated the network is showing resilience as it continues to spread around the world. Interestingly, despite Chinese urges and notwithstanding blackouts in Kazakhstan – surprisingly the world’s second largest Bitcoin miner – the hash rate on Bitcoin just hit another new high, it said. Last Thursday, 215 million terahashes per second were registered.
Buying online at Walmart
Cryptos also got a boost from Walmart: according to CNBC, the supermarket giant registered seven new trademarks late last month to sell goods online – electronics, home decor, toys, cosmetics, etc. Most important, customers will be able to pay with virtual currencies.
Last but not least, that leaves James Malcolm of UBS as a dissenting voice: The crypto analyst wrote that the market is bearish because the U.S. Securities and Exchange Commission (SEC) has not approved Bitcoin ETFs. Moreover, Bitcoin is not a better money, the technology is not mature and regulation is another hurdle, he said. We look forward to seeing how the story continues. Bernstein Bank wishes successful trades and investments!
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