Bitcoin continues to drop but there is the opinion that this is a temporary correction due to the holidays. And after the weekend, the growth of BTC will continue to a new all-time high. When is the best time to buy bitcoin?
A fall in an asset by 10% is not yet considered a trend reversal. Some experts think this is just a correction. However, the fall occurred within a day and may continue – and that’s another story. If the drop continues, then investors need to wait for the low to buy the asset. This lower limit is considered by many to be $13K. This price has long been a resistance level for BTC, now it can become a support level.
Another opinion is that the fall will not continue. The correction is caused by the fact that traders have taken profits. But all the fundamental factors that pushed bitcoin up are still active. This means that its growth will continue. Now traders with small capital are selling BTC. On many exchanges, sales are approaching $1 billion. Taking into account the fact that the capitalization of BTC is now above $310 billion, such sales significantly affect the market and the price of bitcoin.
Just before the fall of the first cryptocurrency, Brian Kelly, CEO of the investment firm BKCM LLC, predicted a drop of BTC to $12K. The expert named too many open long positions as the reason. Exchanges began to charge large fees for opening longs. This clearly indicates that there are too many such contracts. Excessive optimism of traders was not supported by the market, which led to a decrease in the price of bitcoin. Kelly named two support levels, $12K and $14K. And at the same time, he emphasized that he is optimistic in the long term and expects that BTC will eventually grow to $50K.
It is believed that the fall in bitcoin is also associated with new investors. Over the past month, the number of new addresses has grown by 25%. Newbies are prone to panic action, including panic sales.
Analysts also note that it is premature to talk about a trend reversal in the cryptocurrency market until the king of cryptocurrencies drops below $13.9K. This is last year’s maximum. Everything that happens up to this level should be evaluated as a correction, after which a rebound will come.
There are two scenarios for entering bitcoin. Even the current price is good for a long-term investment, as growth is expected to $50K. Speculators have to be careful in order to correctly guess the level of support. Different analysts name different levels: $16K; $14K and $12K. Meanwhile, most analysts believe that the decline will continue in the coming week, and large players are interested in this. By Christmas, new growth is expected for bitcoin and the entire market. This year’s Christmas events in most countries will be more modest due to the pandemic. Therefore, the growth of the crypto market can be explosive.