The crypto winter may be melting away. Is it time to invest?
- Crypto Ed, a popular crypto analyst, predicts that Bitcoin could hit $80,000 – but it has to clear several hurdles.
- Do not rely solely on price predictions to invest in Bitcoin. Instead, ask yourself if Bitcoin suits your investment strategy.
After talking about a crypto winter, people are wondering if we are entering a crypto spring. Just as flowers are tentatively blooming outside, there are signs of recovery in the crypto market. Bitcoin (BTC) broke $47,000 this week, and the total crypto market capitalization remained above $2 trillion for much of the week. But it’s still early.
Crypto has had a rough few months. After hitting new highs in November, Bitcoin’s price halved within a few months, and even slight price increases since then have faltered. However, some analysts hope it will be different this time. Bitcoin has been on an upward trend for several weeks and has finally erased this year’s losses. We are still far from the all-time high of nearly $69,000, and Bitcoin has fallen slightly as I write this. But overall, it appears to be holding at prices we haven’t seen since early January.
Why analysts are aiming for new highs
CoinTelegraph reports that well-known trader Crypto Ed is now “very bullish” on Bitcoin. He says we are heading towards a stage where we are likely to see some shallow corrections, although we cannot yet expect a strong recovery.
His technical analysis shows that a big drop is still possible, but the trader has “strong doubts” that it will happen. In fact, he says he now has a Bitcoin target of $80,000. However, he says Bitcoin needs to go through several stages before it can reach what would be a new high.
READ MORE: Best Crypto Apps and Exchanges
Other popular traders are also bullish. Crypto commentator and trader Michaël van de Poppe told his YouTube viewers that Bitcoin must hold more than $45,000 if it wants to cross the $50,000 mark. For him, this is the next level of price resistance. De Poppe says the odds of returning to recent lows of $33,000 or $35,000 are diminishing.
Is it a purchase?
Bitcoin may eventually reach $80,000 or more in the long run. But the important thing to understand about the above analysis is that these are traders, not investors. The difference? Investors take a long-term approach to building wealth over time. In contrast, traders tend to enter and exit investments to try to make short-term gains.
It’s not always easy to take a long-term approach, especially with an asset class as volatile as cryptocurrency. At The Ascent, we advocate a buy and hold approach rather than short-term trades. It’s not good for everyone, but a long-term perspective can reduce some of the risks of investing in crypto. Market timing is nearly impossible, even for experienced traders. With buy-and-hold, you are also less likely to, for example, pile into a new coin that turns out to be a scam. Additionally, it removes a lot of emotion from your decision-making, so it’s easier to avoid panic buying or selling an asset. There are also tax advantages.
If you are considering investing in Bitcoin, here are three things to consider:
- Your financial situation. If you are falling behind on other financial goals, such as paying off debt or building an emergency fund, now is not the time to buy Bitcoin. Only invest money that you can afford to lose, so that a market crash doesn’t devastate you financially.
- Your risk tolerance and broader investment strategy. Consider how crypto fits in with your other investments. Ideally, high-risk assets should only make up a small portion of your portfolio. And if you generally avoid risky investments, Bitcoin may not be for you.
- Your long-term view on Bitcoin. Before buying Bitcoin, take the time to research cryptocurrency and blockchain technology. Some believe Bitcoin is a bubble that will burst and has no intrinsic value. Others see it as the future of money, with the potential to transform the entire financial system. If you fall into the old camp, Bitcoin will probably never be a good option for you.
At the end of the line
The cryptocurrency industry is relatively new and unregulated, and finding solid ways to value individual assets is often difficult. Accordingly, there are many price predictions for Bitcoin. Ark Invest’s Cathie Wood thinks it could top $1 million by 2030. Crypto skeptic Peter Schiff said it could drop below $10,000.
In the short term, there are many unknowns. These include increased regulatory scrutiny, the Russian-Ukrainian conflict and the Fed’s economic tightening measures. All of these could drive the price of Bitcoin down, but it’s nearly impossible to predict exactly what impact they might have.
It is worth paying attention to analysts’ price predictions and what financial experts think of cryptocurrency in general. But it’s also worth doing your own research and making decisions based on your particular financial situation. Ultimately, it’s easier to endure daily volatility if you have a solid long-term investment plan and a clear idea of how Bitcoin fits into it.
Emma Newbery owns bitcoin. The Motley Fool owns stocks and recommends Bitcoin.
Buy and sell cryptos on an exchange selected by experts
There are hundreds of platforms around the world waiting to give you access to thousands of cryptocurrencies. And to find the right one for you, you’ll need to decide which features appeal to you the most.
To help you get started, our independent experts have sifted through the options to bring you some of our best cryptocurrency exchanges for 2022. Check out the list here and start your crypto journey today.
We would like to give thanks to the author of this short article for this awesome content
Analysts Give New Price Target Of $80,000 For Bitcoin. Is It A Purchase? – Tech Tribune France
We have our social media profiles here as well as additional related pages here.https://metfabtech.com/related-pages/