"Investors need a minimum." When Bitcoin Will Begin Recovery

 

Experts have named two important factors that will allow the first cryptocurrency to complete the correction phase and return to growth.


Over the past three months, the value of bitcoin has been gradually decreasing. The asset moved to a downward movement after it updated the historical maximum above $ 69 thousand in early November 2021, since then it has fallen in price by 38%. On January 10, the price of the cryptocurrency for the first time since September fell below $ 40 million. on January 17, the asset is traded at $ 42.7 thousand Experts explained that it puts pressure on the bitcoin rate and when the cryptocurrency will be able to return to growth.

Investor Fear

The financial world has recently been living in anticipation of a tightening of the Fed's monetary policy, which will lead to a massive flow of investors' funds from emerging markets to the dollar, explained Artem Deev, head of the analytical department of AMarkets. According to him, against this background, there is a correction of stock markets with temporary rebounds and, as always happens in such a situation, investors come out of risky assets, including bitcoin.

"It is quite natural that the bitcoin rate is decreasing, like other cryptocurrencies," the analyst said.

In addition to tightening monetary policy in the United States, the pressure on the bitcoin rate is exerted by the emergence of new strains of coronavirus, which threaten an outbreak of morbidity and disruption of supply chains, says Mikhail Karkhalev, a financial analyst at the crypto exchange Currency.com.

Bitcoin Prospects

Most forecasts agree that the growth of bitcoin this year will definitely happen, Deev recalled. In his opinion, the cryptocurrency is able to recover to $ 60-68 thousand and even reach $ 100 thousand However, when exactly this will happen, no one can say for sure, since several important factors should be realized in the market, explained the head of the analytical department of AMarkets.

"The first condition is the decline of bitcoin to such a mark that will force investors to dramatically increase investment in the asset. It can be a price of $ 20-30 thousand, so that investors decide to take advantage of such a minimum for purchases, "the analyst says.

The second condition, according to Deev, is the stabilization of financial markets, the beginning of the recovery of the world economy, against which the demand for risky assets will increase. At the moment, it is difficult to predict the exact timing of the implementation of these factors, since negative processes in the global economy are only growing, the expert added.

The first phase of recovery

On-chain metrics data indicate that bitcoin is already ready for recovery, says Currency.com, a financial analyst at crypto exchanges. In his opinion, potential risks with the tightening of monetary policy are already included in the price.

"If nothing sudden and supernatural happens, BTC will gradually begin to recover," Karkhalev explained.

The main trigger for the recovery of bitcoin is a record increase in inflation in the United States, the analyst added. It was on the publication of inflation data that the cryptocurrency managed to rebound from the level of $ 40 thousand, Karkhalev recalled.