Bitcoin’s price fluctuations: Insights for savvy investors

Bitcoin has been steadily rising, but there is a potential hurdle ahead. The US Federal Reserve and the UK Central Bank raised interest rates. If such rate hikes continue, it could lead to a drop in Bitcoin’s price. Higher interest rates might attract investors to traditional assets like bonds and savings accounts, making Bitcoin, which is considered riskier. 

Today we are going to show you a comparative study of Bitcoin, its journey, and BTC’s performance in comparison to other asset classes.

The Longest Bear Market for Cryptocurrencies

When the COVID-19 pandemic hit, the US Economy got an influx of money to help out. However, this extra cash led to inflation. So, in 2021, the US Fed decided to raise interest rates repeatedly. They did this to try and put the brakes on inflation. It’s like tapping the brakes on a speeding car. The economy slowed down. Other countries took cues from the US and started doing the same thing to keep their own economies steady, especially in comparison to the US.

Markets crashed like a house of cards, and even Bitcoin was no exception. BTC went from being worth a whopping $70K to a humble $20K in just two years. Now, BTC is slowly getting back up on its feet, but the memory of that bearish market is still hovering in the crypto market. 

When governments decide to tighten the crypto economy, some countries ban or limit crypto trading, which hits the prices. However, when regulations are more friendly, cryptos get more legit and attractive to bigger investors. That is why crypto investors should focus on the regulatory challenges while investing in cryptocurrencies.

Historical Sentiment and Future Prediction

You can compare it to real estate. If houses have been getting pricier for decades, you may think it is smart to buy property. However, history does not always repeat itself. Real estate going up for decades does not guarantee it will keep soaring.

Crypto’s got a similar tale. Many coins went down for a year or two, and Bitcoin’s been inching up from $15K. Remember when Luna crumbled in 2022? Bitcoin price hung around $15-25K. Then big investors like Blackrock and Invesco eye Bitcoin ETFs.

These giants likely made moves earlier. Could they be shaping the game by taking down rivals like FTX? We are in phase two: it is the most boring time when the market consolidates. 

Based on our algorithmic Bitcoin price forecast, BTC will trade under $70K in 2023 but might cross the ATH in 2024. You can expect a massive rally in the next five years when it will cross the $100K.

Understanding the Institutional Interest and Market Manipulation

Indeed, retail investors cannot judge the ideal market time. That is why big players accumulate coins early (in that case, around $12K-$15K), and retail investors will come when it will start to rise instead of accumulating BTC at a lower level. 

As a result, big investors will book profit at that time, and retail investors will buy, and suddenly, the market will crash. As a result, retail investors will sell at a lower value. So, retailers should be careful while investing. Understand the Bitcoin market manipulation, price predictions, and technical, fundamental analysis before investing in any cryptocurrency.

Looking Ahead: Future Predictions for Bitcoin

Bitcoin’s price is affected by various factors. Increased adoption by businesses and people can increase its value as more demand arises. Faster transaction speed, enhancing its practical use, can also positively impact prices. However, understand the regulatory attention because it can lead to uncertainty and downward pressure. Technological advancements, like scaling solutions, may boost Bitcoin as well. 

Understanding the intricacies is crucial for making sound investment decisions in the volatile world of Bitcoin. DYOR, and consult with financial advisors before investing in cryptocurrencies.

Roxanne Williams

Roxanne Williams has recently joined as a market reporter for CryptoNewsZ - the 24/7 crypto news site, where she produces recent stories, technical analysis and price updates on world's leading cryptocurrencies.

Related Articles

Back to top button