In the unpredictable realm of cryptocurrencies, it’s difficult, if not impossible, to predict where an asset will be the moment you leave the crypto exchange’s webpage and right after you’ve made an opinion about its performance. As the behavior of the largest cryptocurrency, Bitcoin, demonstrated to us all when it gained over $3,000 in only a few hours, trying to forecast the next day’s price and adapting the strategy according to assumptions and speculations is not the wisest move. Bitcoin struggled to touch the $3,000 threshold for the better part of the Q3 of the year, gradually climbing as October winded down. It wasn’t until the last few days of the 10th month that it skyrocketed above this well-awaited limit, outperforming all the other assets in terms of percentage growth and sustaining an upward trajectory that had many investors bit their lips frustrated about not dedicating the investment a larger share of their portfolio.
As is normal in the crypto realm, the growth of an asset drags most of the others up with it. Ethereum didn’t record such a fabulous ascendance, but it also worked its way up step by step until it broke over $2,000. BNB, SOL, AVAX, XRP, and more behaved well. The unexpected turnaround of Bitcoin and the high gains recorded are now getting investors to buy more, trade assets to Bitcoins, or change their strategy. The long-term holding thinking has been demonstrated to be the most relevant one, and Bitcoin’s gains these days stand as proof. It’s only normal to be wondering whether now’s the moment to have Bitcoin by your side, comfort it better in your portfolio, or switch any other holding for it. Let’s see what experts believe is bound to happen in crypto and where Bitcoin is headed.
Bitcoin has just hit a new 18-month high
The leading crypto and the inventions that followed suit have been trading in green for the last month, reaching novel 18-month highs two weeks ago, following momentum spurred by the latest upsurge. Numerous elements indicated that the rally would continue, and so it did. Bitcoin’s price gained 7% by 10 November and broke above the asset’s highest price point ever since May last year, going over $37,900. The trend seems to follow as institutional investors like banks, endowments, and mutual funds increasingly focus on the crypto market.
Bitcoin keeps outshining the S&P 500 and Dow Jones Industrial Average, fueled by intrinsic factors in the crypto realm, though the overall situation for risk-sensitive investments has also enhanced. The leading element behind Bitcoin’s upsurge was the aspiration that U.S. regulators would finally authorize the first Bitcoin ETF (Bitcoin exchange-traded fund).
Should you invest in BTC while it’s above the $3,000 level?
It’s only natural to wonder whether Bitcoin will keep going up and follow a similar trend as it has just done, breaking a $4,000 limit and getting into the spot from where everything is bound only to go up. Just as it was about to achieve the $4,000 limit, it stopped climbing and is now hovering under that limit. The same happened earlier this year when it struggled to surpass $3,000. Historically, when the asset hits a threshold, its price keeps expanding over the following months, consolidating. The same is expected to happen after Bitcoin strikes out on the trip, showing the outlook is primarily optimistic regarding its price action.
High expectations continue to exist for the inaugural Bitcoin ETF, fueling growth
The concept of the first Bitcoin exchange-traded fund has sparked a lot of excitement within the crypto community, mirroring a similar level of interest when it comes to Ethereum. The continuous optimism surrounding the approval of a mutual fund that will facilitate investing undertakings for investors of all levels of experience and expertise serves as a main fueler of the asset’s continuous price pumps. The Bitcoin ETFs will monitor the asset’s value and trade on the numerous traditional market exchanges instead of the commonplace crypto ones. They will also accumulate investors’ money in a pool to purchase BTC futures contracts, also known as agreements to purchase and ditch an asset at a specific time.
Crypto investors have spent the year waiting for a conclusion from U.S. regulators. Despite the delay to do so and the postponed release date established for the following year, investors kept their hopes high and expectations even more heightened. The ongoing positivism is anticipated to usher in a new wave of interest in cryptocurrency from retail and institutional investors’ sides, which acts as a beneficial force for the assets’ performance.
The potential returns cover a broad spectrum
Bitcoin could gain as much as $2,500, stagnate for a while, or continue consolidating and growing gradually in price with small gains. If you look at a less optimistic scenario that would require the collapse of a major financial institution to become reality, Bitcoin could also lose significant chunks out of its price. Few would’ve anticipated the FTX crash, yet it happened when customers withdrew so large sums that they left an $8 billion hole in the exchange’s accounts, as the official statements reveal. For similar reasons, it’s precautious to always keep in mind the possibility of having assets exposed when their value is set by external factors like macroeconomic landscapes, major financial players’ moves, fluctuating inflation rates, and so on.
However, the better part of investors remain bullish. Firstly, traders maintain a bullish perspective, engaging substantially in the crypto derivatives market, further pushing the prices up. Additionally, a notable Bitcoin call options volume was noticed. Call options enable traders to purchase an asset at a pre-established price, highlighting this bullish sentiment. Another indicator of an ongoingly improved performance is the Crypto Fear and Greed Index, approaching the highest level since November 2021, when Bitcoin marked its ATH of around $69,000.
There are other factors that you should consider besides its current price.
Bitcoin’s future looks promising given investors’ high expectations about the first ETF approved, the upcoming BTC halving that historically saw the asset’s price grow, and potentially lowering interest fees. However, these aspects aren’t all that there is to consider before deciding your move in the crypto market.
It’s wise to take into account your risk tolerance, your portfolio diversification strategy, your investment style, and other factors that will ease your journey throughout this unpredictable realm. Practice patience and vigilance, as Bitcoin is going nowhere!
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