After months of pain, has the Bitcoin (CRYPTO: BTC) price finally made its last walk down despair avenue?
Cryptocurrency investors have received an extended stint of repetitive lashings since late last year. During this time, the Bitcoin price has receded by a tearful 54% from a top of A$91,100. Today, the original decentralised peer-to-peer payment network is fetching a price of A$41,640.
However, with the fear and greed index displaying ‘extreme fear’, has the more than decade-old cryptocurrency reached a floor?
More pain or gain ahead for Bitcoin price?
As always, there are forecasts being hurled by analysts of all shades between green and red. Though, there are a couple of factors that may suggest the original crypto is getting set for an upwards movement.
First of all, Tuesday’s bounce that saw the Bitcoin price surge from A$40,500 to A$44,000 broke a nine-week drought of green weekly returns. Commenting on this, head of technical strategy at Fundstrat Global, Mark Newton stated:
While it might take some time for intermediate-term trends and momentum to improve, it looks right to position long for rallies up to $US34,218 (A$47,783) initially. This marks the first meaningful upside target that also aligns with BTC-USD’s two-month downtrend.
In other positive news, Bitcoin’s scaling solution for processing transactions — also known as a layer-2 protocol — reached a new all-time high for processing capacity. On 27 May, the Lightning Network hit a capacity of 3,915 BTC.
Another indicator that might suggest that the Bitcoin price is nearing a bottom is the disconnect between mining cost and mining rewards. As reported by CoinDesk, the high cost of electricity, paired with falling crypto prices, has resulted in unprofitable operations.
Many Bitcoin mining companies have sold their mined bitcoins in order to sustain operations. This has created downward pressure on the price of the cryptocurrency. In a way, this incentivises further adoption of renewable energy for Bitcoin mining. Which could wash away a pollutant cloud that has hung over Bitcoin’s head.
Wondering where you should invest $1,000 right now?
When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*
Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.
*Returns as of January 12th 2022
- Why is the Bitcoin price bouncing back this week?
- Down 17%, what went so wrong for the Bitcoin price in May?
- Bitcoin price decouples from tech shares, but not as hoped
- Why Bitcoin, Dogecoin, and Shiba Inu are falling today
- This is the top performing crypto in 2022 so far, and it sure isn’t Bitcoin
Motley Fool contributor Mitchell Lawler has positions in Bitcoin. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Bitcoin. The Motley Fool Australia owns and has recommended Bitcoin. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
from The Motley Fool Australia https://ift.tt/9lc4iXq