Along with traditional financial markets like shares and bonds, cryptocurrencies are having a terrible year due to high inflation and rising interest rates. While the market capitalization of all cryptocurrencies has decreased to below $1 trillion from a peak of close to $3 trillion in November of last year, Bitcoin has fallen 57% this year.
Despite the gloomy economic outlook and the fact that Fed Chair Jerome Powell reiterated his plans for aggressive interest-rate hikes at the Jackson Hole Economic Symposium last week, a number of metrics on the cryptocurrency market point to the possibility that depressed prices may represent an appealing entry point.
Some analysts claim that it’s appropriate to place short-term contrarian bets because a number of BTC measures are sitting around historic lows and crypto traders’ sentiment is predominantly negative.
Leading cryptocurrency analysts are advising investors to consider placing a contrarian bet on Bitcoin’s (BTC) price increase even as evidence of Federal Reserve moves to lower risky asset prices continues to build.
$17,000 is a crucial level for BTC
The head of research at cryptocurrency company Galaxy Digital Group, Alex Thorn, stated that even if another crash were to occur, investors who purchased bitcoin during earlier, less favorable periods in the cryptocurrency’s history would likely see a profit within a month.
He identifies $17,000 as a crucial level that would offer solid price support if the biggest cryptocurrency were to abruptly begin to decline. At the time of publication, the price of bitcoin was fluctuating about $20,000, a significant decrease from the record high of $69,000 set in November.
“While macroeconomic factors and monetary tightening can cause bitcoin to trade lower in the near term, for several reasons, both technical and fundamental, these levels should be considered opportunistic buying opportunities,” Thorn said in a report.