empty
 
 

Forex Analysis & Reviews: Bitcoin: two signs of readiness for a bull rally
time 05.12.2022 11:42 PM
time Relevance up to, 08.12.2022 12:15 PM

Bitcoin is up 1.24% on Monday at the time of writing. Nevertheless, it's still within a sideways range of $15,792-$17,592, the upper limit of which is the level drawn from the July lows.

Until the price is above the $17,592 limit, it is too early to talk about any bullish signs.

This image is no longer relevant

Nevertheless, prominent traders and analysts in the cryptocurrency community are increasingly predicting a move to a bull market.

Attention on realized price and DXY

InvestAnswers, a popular crypto analyst, says that on-chain signals suggest BTC is overdue for a rally.

The analyst examines Bitcoin's Realized Price (RP), which captures the value of all BTCs at the price they were bought, divided by the number of bitcoins in circulation.

InvestAnswers says that BTC never stays below the RP for long.

"We're counting down to the next halving and here we've been under the realized price... it's now 170 days and the actual price is under that RP of about $21,000, suggesting an upswing in the actual price.
And you can see how the Bitcoin price is pretty much, most of the time, above the RP... It's to the tune of like 97% of the time, 98% of the time it's above that. Now it's below. Now the question is, how does that shape up in history?"

According to the analyst, Bitcoin stayed below RP for 110 days in 2011, it stayed a little longer at 240 days in 2015, 115 days in 2018, 8 days in 2020 and 170 days in 2022, which means that the Bitcoin price is about to soar.

InvestAnswers says that the rising weakness in the US dollar index suggests a likely rally. The index is inversely correlated to the risk-on assets, meaning that if it goes lower, cryptocurrencies go the other way.

"This is a pretty cool sign because as we know, as DXY goes up, Bitcoin goes down, and vice-versa. They are inversely correlated. If history repeats – and we've said that a lot lately – this chart signals a possible breakdown. If this does happen, this will be very good for the risk-on space as well."

Long-term forecast: why BTC will reach $250,000

Let's take our eyes off the current bear market and look at long-term forecasts. They are especially important after the collapse of FTX has once again shaken confidence in the industry.

Mark Yusko, the Founder, CEO and Chief Investment Officer of SEC-registered investment advisor Morgan Creek Capital Management, LLC, explained in a recent interview why he believes the long-term price of BTC will reach $250,000.

Yusko noted:

"In the future, Bitcoin will win because it is an asset that exists in the absence of liabilities, which is the definition of money. And so it is superior to gold. It has advantages in that it's more portable and more divisible than gold. So I think Bitcoin will eventually replace gold.
In the future, Bitcoin wins because it is an asset that exists in the absence of a liability, which is what the definition of money is. And so [BTC] is superior to gold. So it does have advantages in being more portable and more divisible than gold, so I think it will eventually replace gold.
$5 trillion, the monetary value of gold, roughly equals $250,000 price per Bitcoin. Now, it won't all happen tomorrow, but over time it's going to happen."

Crypto winter VS crypto-spring. Where are we?

Yusko also believes that the Fed will soon need to halt its quantitative tightening program, which should lead to the next bull cycle:

"I actually do believe crypto winter is over. I believe we're in crypto spring. I believe we have seen the bottom. That doesn't mean we can't retest it. It doesn't even mean we couldn't go a little bit lower than that, but I really do think that the cathartic unwind of the leverage in Bitcoin happened and I do think we're having a little follow through here with a 'buy the rumor, sell the news' about the merge."
"My personal belief is we're in recession.. I think the Fed could overtighten and break things... I think because of that, the Fed will reverse. When they reverse, we're going to have a face melter of a rally. I mean a face melter because the shorts are going to get scorched and the amount of shorts in crypto is massive."

Prerequisites for the mass appeal of cryptocurrency

Back in August, Yusko pointed out that the crypto industry needs to work on simplifying cryptocurrency wallets to gain mass appeal.

Yusko, who admitted to being a fan of hardware wallets, said that many retail investors have been paralyzed by the choices offered by various cryptocurrencies.

He noted several good options currently on the market, such as Ledger, but characterized mass crypto adoption as requiring a more simplified process.

Yusko also mentioned that a merging of smartphones and crypto wallets would provide much more appeal to the average user, making it so that crypto supporters wouldn't have to worry about complexities such as seed phrases and private keys.

He suggested that making crypto wallets invisible would lead to "gazillions" of people adopting crypto.

Ekaterina Kiseleva,
Analytical expert of InstaForex
© 2007-2023
EURUSD
Euro vs US Dollar
Select timeframe
5
min
15
min
30
min
1
hour
4
hours
1
day
1
week
Start trade
Start trade

InstaForex analytical reviews will make you fully aware of market trends! Being an InstaForex client, you are provided with a large number of free services for efficient trading.

Earn on cryptocurrency rate changes with InstaForex
Download MetaTrader 4 and open your first trade
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST
  • Chancy Deposit
    Deposit your account with $3,000 and get $1000 more!
    In February we raffle $1000 within the Chancy Deposit campaign!
    Get a chance to win by depositing $3,000 to a trading account. Having fulfilled this condition, you become a campaign participant.
    JOIN CONTEST
  • Trade Wise, Win Device
    Top up your account with at least $500, sign up for the contest, and get a chance to win mobile devices.
    JOIN CONTEST
  • 100% Bonus
    Your unique opportunity to get a 100% bonus on your deposit
    GET BONUS
  • 55% Bonus
    Apply for a 55% bonus on your every deposit
    GET BONUS
  • 30% Bonus
    Receive a 30% bonus every time you top up your account
    GET BONUS

Recommended Stories

BTC update for February 06,.2023 - Support zone is on the test

Technical analysis: BTC/USD has been trading downside but key support zone at the price of $22.600 is on the test. Trading recommendation: In case of the rejection of the support

Petar Jacimovic 09:30 2023-02-06 UTC+2

Technical Analysis of ETH/USD for February 6, 2023

Crypto Industry News: A set of rules to mitigate cryptocurrency risks was signed last week by the White House and National Economic Council director Brian Deese and Office of National

Sebastian Seliga 08:57 2023-02-06 UTC+2

Technical Analysis of BTC/USD for February 6, 2023

Crypto Industry News: During a recent visit to Sri Lanka, American billionaire Tim Draper introduced the idea of adopting Bitcoin as legal tender in the fight against corruption that

Sebastian Seliga 08:57 2023-02-06 UTC+2

Elliott wave analysis of Litecoin for February 6, 2023

Litecoin is in a minor correction, that ideally should terminate near 94.00 for the next push higher towards 1.0782 to complete wave iii and set the stage

Torben Melsted 06:12 2023-02-06 UTC+2

Ray Dalio: Bitcoin will not be able to replace fiat money.

It is even greater to observe that bitcoin has approached the level of $24,350 on the 4-hour TF. Although there hasn't been a noticeable rebound from this level

Paolo Greco 19:26 2023-02-04 UTC+2

The bitcoin cryptocurrency is nearly at $24,350

The bitcoin cryptocurrency is almost at $ 24,350 and is steadily increasing toward this level. Since bitcoin's price is rising virtually daily, its growth is not that weak. We believe

Paolo Greco 19:07 2023-02-04 UTC+2

Bitcoin challenging support, 23,250 today's low as obstacle

The price of Bitcoin crashed in the short term and now is trading at 23,317. BTC/USD dropped by 4.16% from yesterday's high of 24,258. The current sell-off forced the altcoins

Ralph Shedler 15:34 2023-02-03 UTC+2

Bitcoin updates price highs less aggressively: what this means and should we expect a correction?

The cryptocurrency market and Bitcoin are entering a local phase of volatility. The ratio of short and long positions gradually reaches parity, which provokes an impulse price movement in different

Artem Petrenko 11:52 2023-02-03 UTC+2

BTC update for February 03,.2023 - Support zone is on the test

Technical analysis: BTC/USD has been trading downside this morning and I found that support zone at the price of $23.300 is on the test. Trading recommendation: Due to the strong

Petar Jacimovic 09:54 2023-02-03 UTC+2

Technical Analysis of ETH/USD for February 3, 2023

Crypto Industry News: Berkshire Hathaway (BRK) Vice Chairman and staunch skeptic of the crypto market, Charlie Munger, has called on the US to follow China's lead and ban cryptocurrencies altogether

Sebastian Seliga 09:17 2023-02-03 UTC+2
Can't speak right now?
Ask your question in the chat.