- After the start of the year, Bitcoin has stabilized slightly and is back in the green, gaining 2% in the last day.
- Some analysts argue that this stabilization is crucial for Bitcoin and some believe that it will enable the crypto to regain its former glory and move towards $ 60,000.
After one of the worst startups of the year, Bitcoin seems to be stabilizing again. The most important cryptocurrency is trading over $ 43,000 and has gained more than 2% in the last 24 hours. While much of the recently lost ground is still to be recovered, analysts say this is a good starting point and could set BTC for a return. Some are even predicting that it won’t be long before he starts testing the $ 60,000 price point again.
At press time, BTC is trading at $ 43,140, up 2.01% on the last day.
Having fallen below $ 40,000 on Monday for the first time since August last year, BTC has run a rally that analysts now believe will be a catalyst for it to return to previous highs.
According to Craig Erlam, Senior Market Analyst at Oanda, all Bitcoin needs is momentum. In his daily bulletin, he said:
If bitcoin can break $ 45,500, we could see another sharp move higher, as the belief begins to grow that the worst of the chase is behind us.
Tailwinds for Bitcoin include rising economic uncertainty, high inflation, and a falling dollar index, down nearly 1% in the past week. A fall in this index generally falls well for assets that are considered risky, and Bitcoin has squared into this category in recent months.
Lennard Neo, head of research at Stack Funds, a cryptocurrency investment firm, said:
Recently Bitcoin has become more of a risky asset amidst market uncertainties. Markets remain divided on whether BTC is an inflationary hedge or a risky asset, and with the current macro climate, more volatility is expected in the short term.
Given Neo’s views, there is a debate in the BTC community: is Bitcoin an inflationary hedge or a risky asset? Over the years, the news that BTC is digital gold, is a consolation against market conditions. Many companies bought millions of dollars worth of BTC based on this idea, including the ever-optimistic Microstrategy.
But details from the last days paint a different picture. Bitcoin is closely tied to risky assets, with its price movements in line with normal macroeconomic conditions. For example, when the U.S. Federal Reserve recently revealed that it was reducing its injection of money into the economy, more risky assets were hitting sales and Bitcoin was not exempt. In fact, this was a major factor in the fall below $ 40,000 earlier in the week.