While multiple indicators are shouting “buy” at $20,000, it is becoming the “new” resistance for Bitcoin price. Analysts share their views on the future of BTC price.
Has Bitcoin price bottomed out?
With Bitcoin trading above $60,000, the smartest analysts and financially minded public told investors that the BTC price would never fall below its previous all-time high. The same people also claimed that $50,000 is an opportunity to buy at the bottom. Then they suggested that $35,000 was an opportunity to buy for generations. Later, they said that BTC would never fall below $20,000.
Of course, “now” is a great time to buy the bottom! Some may think that buying $10,000 or less for Bitcoin is also a lifetime purchase. But so far, the so-called ‘experts’ have all been silent and are nowhere to be seen or heard. So investors are left to their own devices and thoughts to consider whether the bottom is in. Should we be patient and wait for the forecast to “drop to $10,000” or is now the time to buy Bitcoin and altcoins?
In general, looking for bottom prices is a futile task. What is really important to focus on is whether there are fundamental reasons for choosing to invest or not to invest in Bitcoin. Of course, the Bitcoin price has changed drastically. But have Bitcoin’s network fundamentals and infrastructure surrounding Bitcoin as an asset improved or diminished? It is important to evaluate these data. Because for investors, this should be the source of trust and investment theses. Analyst Joe Burnett from Blockware Solutions and Colin Harper from Luxor Mining shared their thoughts on this issue.
When will the Bitcoin price rise?
According to Blockware Solutions analyst Joe Burnett, Bitcoin price is heavily influenced by Fed policy. Also, the impact of stock markets is significant. Burnett explains:
The macro environment is clearly putting heavy pressure on the Bitcoin price. High CPI has led to an aggressive Fed since November 2021. Higher interest rates inevitably cause all assets to fall. Interest rates are basically the weight on financial assets. And these rising interest rates are the Fed’s attempt to destroy demand and inflation. It clearly puts pressure on all risk assets, including Bitcoin.
As you follow on Kriptokoin.com, the on-chain Bitcoin Hash Ribbon indicator showed that BTC has bottomed out. Further, the indicator suggested that miners capitulated, confirming that the Bitcoin bottom is inside. About this indicator, Burnett said, “I think you should definitely take on-chain type indicators with a grain of salt. You can’t look in a vacuum and say yes, Bitcoin bottom is in,” he says. Additionally, Burnett explains:
If US stocks make new lows, I definitely expect Bitcoin to follow. However, if you’re looking at the fundamentals of Bitcoin itself, I think small capitulations typically mark Bitcoin bottoms. And a hash-focused indicator created by Charles Edwards basically shows a little capitulation this summer.
Synergy between Big Energy and Bitcoin miners is a net positive for BTC
Discussion of the growing partnership between major energy providers, oil and gas companies, and industrial-sized Bitcoin miners has been a hot topic throughout 2022. When asked about the direct benefits of this relationship to Bitcoin itself, Colin Harper says:
I don’t think mining is doing anything bad or good for Bitcoin. I actually think it’s good for Bitcoin in the long run in the sense that it strengthens network security, decentralizes mining, and places it in every corner of the world if you have energy producers that do the mining. But in terms of actually doing anything for the price, I think it’s just a case of wider adoption. And it matters whether people use it every day as a medium of exchange, a store of value, and just a general investment.
“If these companies start mining, then it gets tastier. Less stigmatized. I guess it depends on the oil producer and that person’s policy,” he says. Additionally, Harper notes what mass adoption of Bitcoin might look like in the future with regard to the growth of the mining industry:
It will be a matter of time before they start integrating Bitcoin into their stacks. And I think that makes it very difficult for people who don’t own those assets to eventually make a profit when things get interesting from a mining perspective as an industry. Because you will see the hash price already traded backwards. Finally, you can imagine a future where only energy producers and those who invest in or are involved in energy producers can truly profit from Bitcoin mining.
These will drive the growth of the Bitcoin Lightning Network
Both analysts agree that the growth potential for tier 2 Bitcoin is bright, although it will take several years. Burnett said, “Over time, more and more people will learn to demand the final settlement of their Bitcoins. That means more people will have their own keys,” he predicts. Additionally, Burnett says:
If Bitcoin adoption increases 100x or 1,000x, there will be much more competition for scarce block space. People will demand much more placement in the base layer. Therefore, on-chain fees will likely increase. But the block area to be placed on the base layer is fixed. Therefore, the increase in on-chain fees will provide Lightning Network liquidity. This will make it more valuable.
Harper wholeheartedly accepts Burnett’s views. He also says that the Lightning Network will be what allows Bitcoin to be used as a medium of exchange around the world.
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