January is not over yet, and bitcoin has fallen in price by 17 percent, thus continuing the multi-level dump of the past year. The scenario could be called predictable if the market did not turn up on January 9th. Today you can sell bitcoin for 37-38 thousand dollars. Should we regard the current reversal as the first wave, or is the usual correction looming on the chart?
Buying Bitcoin for $32,000 is still possible
This often happens in the cryptocurrency market – traders have already tightened their belts, and the asset allegedly hit the bottom, after which it bounced. Moreover, it was possible to manage to buy bitcoin at a bargain price if the target audience often paid attention to the news background and analyzed the behavior of major players:
● In the first days of 2022, Kazakhstan was engulfed in massive unrest, and this country accounts for about 18 percent of the world’s mining capacities (it’s not without reason that the bitcoin hashrate dropped to 170 Eh / s);
● BTC’s largest institutional contributor MicroStrategy continues to acquire the digital asset, as evidenced by a recent deal worth over $90M (purchased when Bitcoin was over $42,000);
● Promising altcoins (eg MATIC, FTM, LUNA) over the past year have risen in price by tens to hundreds of times, and therefore cease to attract in the same way as top cryptocurrencies.
As of January 28, Bitcoin has a market capitalization of $687 billion, more than the total capitalization of the top altcoins. Although it is worth recognizing that the corresponding figure for Ethereum is approaching $ 300 billion. Is it worth it to exchange bitcoin for an outsider because of this? If we are talking about the limited volume of BTC and the prospects of the counterparty, then the answer is yes. But you need to wait for the moment, which is very difficult given the duplication of the BTC trend by third-party assets. Therefore, analysis comes to the rescue: the average purchase price of BTC MicroStrategy is $30,000. If, after the upcoming weekend, bitcoin continues to fall in price, then the drawdown may reach $34,000-$38,000.
When is the best time to trade bitcoin for altcoins?
Third-party virtual assets are good because they rise and fall in price better than BTC. Moreover, their trend repeats the behavior of the leader, and sometimes this duplication occurs with a slight delay, which allows you to sell bitcoin in time or, conversely, buy it. In crisis situations, switching from bitcoin to altcoins is a good solution. But you need to be guided by several points:
● Firstly, the development of the selected altcoin should be carried out by leading experts, and the token itself should be based on the Proof-of-Stake protocol (in this regard, bitcoin and ethereum are imperfect);
● Secondly, the altcoin can receive third-party advertising support from various gurus and even politicians.
The latter option often affects BTC. For example, the CEO of Swiss Bank Seba, Guido Buhler, considers the probability of selling Bitcoin for $75,000 in 2022 very high. In doing so, Buhler is guided by internal market models.
There is also a negative forecast: cryptanalyst Lark Davis points to overcoming the “cross of death”, which in most cases provokes a 30-65% sale of the asset (a sharp decline in the rate) or “reaching the bottom”. In the current situation, a six-month-old rate of $28,800 deserves a similar formulation. This figure is almost equal to the average cost of BTC purchases by MicroStrategy.
