Cryptocurrencies are a relatively new asset class, and over the years, they have continued to be the subject of scrutiny and criticism. Despite the success they’ve recorded over the years, many still believe that digital assets and tokens are entirely unreliable and that everyone who invests in them is willingly subjecting themselves to a scam of serious proportion.
While there’s no denying the fact that cryptocurrencies are associated with elevated volatility and fluctuations, the latest Bitcoin price chart figures indicate that the number of investors willing to add capital to a crypto venture and include digital assets among their list of holdings continues to rise.
There are many reasons for this development, with the general economy continuing to be somewhat weak and uncertain being one of the primary ones. When standard marketplaces are not doing very well, people tend to gravitate towards asset classes that they may not even have considered in the past as a result of them being too risky or volatile.
But is this not an indicator of the fact that desperate people resort to desperate measures instead of a testament to the reliability and usability of cryptocurrencies? Are crypto coins still a valid form of investment, and is Bitcoin still a potential wealth creator? Or is it time for investors to set their sights elsewhere?
The overview
Bitcoin has been going through a rollercoaster ride over the last couple of years. 2020 was a halving year, and most community members expected things to unfold positively. Luckily, their predictions turned out to be true when the marketplace skyrocketed to new levels only a few months later.
2021 was a significant time for Bitcoin users as the price reached $69,000, an incredible level that led many to consider BTC as a reliable investment option on par with traditional assets and holdings. However, this didn’t last long, and in fact, this period can be regarded as the calm before the storm in retrospect.
That’s because, in 2022, Bitcoin lost a considerable part of its value, with losses of around 70% during the most intense part of the bear market. The environment plunged into a crypto winter, one that was named the most severe in the entire history of cryptocurrencies by some analysts.
While others pointed out that technical analysis indicates other events of this kind that took place in the past lasted longer, what set the one in 2022 apart was the fact that BTC had reached such a high level only one year earlier. To see all that melt away so quickly was tough for investors from all over the world, many of whom lost significant portions of their capital.
Some of them decided to abandon crypto altogether out of fear that they’ll have to deal with even bigger losses in the future. Bitcoin reached a new bottom in 2022, settling at $16,000. For this reason, investors eagerly waited for the start of the new year, which was predicted to help the price bounce back.
January offered an opportunity for this, and BTC climbed to $20,000. By April, it touched the resistance area at $30,000, a level that hadn’t been reached since June 2022, right before prices had started dropping severely.
While Bitcoin achieved a lot during 2023, investors continued to hope for better. 2024 kickstarted the beginning of a new era for BTC, as the approval of the exchange-traded funds caused a spike that took the price to a new all-time high, a little over $70K. The gains didn’t last long though, and were followed by considerable corrections.
As of November, the Bitcoin price has been showing stronger performance levels than ever before and managed to surpass all of its previous records. On November 18th, the BTC price was around $89,500, leading investors to believe that a six-figure value would become reality much sooner than expected.
Investor sentiment
Since the crypto market is entirely decentralized, how the prices change and evolve is the result of a large number of factors. Volume, the general economic situation, and market sentiment are among the most essential aspects, and investors are careful to check these metrics before making important decisions.
Some researchers have attributed Bitcoin’s current weak performance to whales and their activities, as this investor demographic finished a long phase of accumulation and has, therefore, reduced their positions. An address linked to one “Mr. 100” reached a peak of more than 73,000 BTC after accumulating over nearly a week. Paired with the exchange-traded funds’ outflows, analysts believe that this investor created turmoil within the community.
The derivatives and stablecoin flows have generally shown signals of decreased confidence levels among traders. Options data confirms an increase in temporary demands for downside protections as investors want to secure their portfolios. In the past, times of negative funding rates were typically short-lived, indicating that the bears don’t believe it is safe to start selling anywhere below the $60,000 mark.
Uptober
October has traditionally been recognised as a positive time for cryptocurrencies, a month during which digital assets perform well and investors see significant gains. This is particularly noteworthy in the context of the fact that September has the opposite reputation of being a time when the crypto market is doing quite poorly.
However, this year, some traders have said that it would be a mistake to overinflate the importance of the entire month. This is because, under closer scrutiny, it is revealed that only the later part of October is recording bullish tendencies, not the first weeks. Data shows that Uptober tends to start around the 19th at the earliest, so it is vital for investors to remain patient and avoid making any impulsive decisions.
The statistics show that this is actually true for 2024 and that the marketplace is currently navigating the slowest October in the last decade. The prices of both Bitcoin and Ethereum have declined since the beginning of the month, but the second half of October is more likely to make room for more robust growth. The last week of October may kickstart the beginning of the bullish cycle that continues until the end of the year, and then Bitcoin prices will be taken into the six-figure area that most investors expect.
Bitcoin is the most important cryptocurrency in the world, with the highest market capitalisation level. Investors have started trusting its abilities and believing in its value in increasing numbers, so although the market has been dealing with some challenges, it remains robust. In order to be successful in your trading ventures, though, you must still be ready to create a comprehensive strategy that is personalised to suit your goals and takes the long-term picture into account.
