Bitcoin has been moving sideways around its current levels with no clear direction on lower timeframes. The cryptocurrency has experienced its worst-selling pressure in years but has held firmly around its 2017 all-time high. At the time of writing, Bitcoin trades at $20,140 with a 4% profit in the last 24 hours. The general sentiment in the crypto market has been turning more positive, as NewsBTC reported yesterday, as the Crypto Fear and Greed Index climbs back from Extreme Fear levels.
According to Senior Commodity Strategist Mike McGlone, Bitcoin and the crypto market are near their 2018 drawdown levels. At that time, the nascent asset class experienced a similar bearish trend which pushed BTC's price to a 75% loss from its ATH. At that time, the $3,000 price point became a major bottom which saw a period of accumulation extending for multiple years. In 2020, when global markets were in turmoil due to the COVID-19 pandemic, BTC marked the bottom once more when near $3,000. After that, the cryptocurrency began a new ascend into price discovery. This time macro-economic conditions are different, and Bitcoin could retest its yearly low of around $17,000, but McGlone suggests it has reached a point where long-term holders could profit in the second half of 2022.
Since its inception, BTC's price has historically found a bottom around previous all-time highs. McGlone claims there are conditions for $20,000 to operate as this pivot support level in 2022 on the back of a decline in "risk measures" against the traditional market. Bitcoin at $20,000 may be looked back upon like $2 in 2011, $200 in 2015 and $3,000 in 2018. Bitcoin and Ether risk measures are falling vs. equities and the potential for US regulation (Lummis-Gillibrand crypto plan) shows mainstream maturation.
On lower timeframes, Bitcoin has been able to stay above $20,000 despite the decline in traditional markets and the strength of the U.S. dollar. The U.S. currency is approaching a 20-year-old high as investors continue to de-risk amid current macroeconomic conditions. Data from Material Indicators (MI) records around $20 million in bid orders for BTC's price from $20,000 to $19,000. These levels should operate as support in case of further downside as BTC whales continue to accumulate.
As the traditional finance world realizes Bitcoin's potential for disruption, they must choose either to adopt cryptocurrencies or face irrelevance. The personal decision to invest in bitcoin comes down to your appetite for risk and your perspective on the future of humanity. For example, Russia has stated they are looking into cryptocurrencies to lower its dependence on the US dollar. Bitcoin has the potential to disrupt the US Dollar in a massive way, and it is simply too big to be ignored at this point. The main reason a traditional investor may want exposure to Bitcoin is to hedge against inflation and potentially the collapse of the fiat-based economy. Bitcoin's volatility is a concern to many investors, however, volatility is expected to decrease forever as institutions and governments enter the market with long-term interest.
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