Over the last 8 months we have become used to the first cryptocurrency showing more and more highs. Appetite comes with a meal. And even a little slippage starts to get annoying, causing bewilderment and questions.
The problem is particularly acute when other altcoins are growing. And most notably the second most capitalised cryptocurrency, ETH. Bitcoin seems to have stalled and is unable to continue moving north.
Is that really the case? No, it isn’t. If you look at the chart, you can see that the previous high, near $65,000, was shown just 20 days ago. This was followed by a sharp pullback and a new rise. At the moment, BTC is about 12% below its all-time high.
Therefore, the impression that bitcoin is not growing is formed by the previous very rapid growth of the first cryptocurrency. It is now in a corridor, gathering strength for another jump upwards. The main obstacle is the perception that BTC is already too expensive.
Indeed, for those investors who hold positions starting at $3-10k, buying up at the current price of $55-60k seems insane.
However, during that time a lot of investors and new money came into the market and entered BTC at much higher prices. And for them a price of 55-60k does not seem so high.
Another thing is also relevant. Right now new investors and funds are entering the market again. And right now they see a price that suits them (and if it didn’t, they wouldn’t have come to the market). Moreover, this price, as we noted above, is below the all-time high. And so there is an entry into the market by trend on a pullback.
The only thing that could shake bitcoin in the medium term is a real fight against inflation by the US Federal Reserve. But as we can see, as long as more money keeps coming into the market, there is no talk of a rate hike.
Therefore, the risk/reward ratio, with a horizon until the end of the year, continues to be positive for buyers of the first cryptocurrency.
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