Will Bitcoin recover? Will Bitcoin go back up? When will it go back up?

Will Bitcoin recover? Will Bitcoin go back up? When will it go back up?

Will Bitcoin recover? Yes it will but conditions are extremely uncertain on account of the FTX scam


How low will Bitcoin go?

Bitcoin is trading close to the yearly low as it continues to struggle from scams that have bedeviled the cryptocurrency industry. While the macroeconomic situation has stabilized, there is little visibility on how many more cryptocurrency companies are likely to go under over the next few weeks. The worst-case scenario for Bitcoin is between $10k and $15k.

Will Bitcoin recover?

With new revelations and more companies admitting they are in trouble, it is early to say this is the bottom. Perhaps we will have a clearer view a few weeks from now.

However, from a macro standpoint, it looks like Bitcoin has reached its bottom for the year. As expected the pace of layoffs has increased and unemployment is likely to rise as the economy adjusts to an economy with less Fed-induced liquidity.

Let us first learn from 2017-2018.

The Federal Reserve squeezed the size of its balance sheet during this period. This squeeze began in January 2018 and ended in August 2019. A total of 20 months. During this period, this is how Bitcoin performed.

  • Price on January 1st, 2018: $14,110k
  • Price on August 31st, 2019: $9,598
  • Highest Price during this period: $17,462
  • Lowest Price during this period: $3,244 [December 2018]

The lowest point was 77% lower than the entry-level. So what made Bitcoin move higher from this lowest point in December 2018? One simple reason is unemployment began to move higher from December 2018 (Reported in January 2019). However, unemployment remained at subdued levels all the way to Feb 2020. Bitcoin was priced at $9,290 on Feb 1st, 2020.

Bitcoin price is heavily dependent on liquidity and this is a facet of any speculative asset. Therefore, all future price forecasts will depend on how liquidity plays out during the next few months and years.

At a broader level, we do expect Bitcoin to recover over the next 12-18 months

False Pumps in 2018

On Feb 6th, BTC was priced at $7,050, it rose all the way to $11,500 by March 6th, a 63% pump. It then fell all the way to $6.8k by April 2018 and $3.2k by December 2018.

Bitcoin price will certainly go up. However, the time frame is unclear at the moment. There are many loose ends

So it is not possible to indicate a specific time when the recovery will happen. There are two schools of thought

  1. The global economy will slow down in the 4th quarter of this year and the 1st quarter of next year. By the second quarter of next year, Europe will have resolved most of its electricity issues and Global supply chains would have improved. In this situation, we could see Bitcoin moving lower a little until December and then moving higher
  2. The second situation is, that Europe collapses due to the Gas and Electricity crisis dragging a large number of emerging economies along with it leading to a much longer recession (3-4 years)

The Odds of (1) are higher at the moment but it is not definitive. We may have firm visibility over the next 3-4 weeks. That said, as a long-term investor (3 to 5 years) Bitcoin is still a good buy. There could be some volatility but over a 5-year period, Bitcoin could deliver tremendous returns.

However, looking at the current market condition, it would take longer than predicted for Bitcoin to recover. Therefore, the answer to “Will Bitcoin Recover Soon” is No.

Read Bitcoin Price Prediction here

Note: Crowdwisdom360 collates Predictions and data from all over the net and has no in-house view on the likely trends in the Index or Individual Stocks. Please consult a registered investment advisor to guide you on your financial decisions. 

Will Bitcoin Recover Soon? How low will it go? Will it be back up in 2022?

Featured Photo by Karolina Grabowska on Pexels.com

Subhash

Subhash

Subhash, Founder of Crowdwisdom360 is an MBA and a Trained Financial Advisor with an extensive background in Forecasting in Financial Services and Politics. He has appeared many times on National TV and has written for a variety of magazines on Wealth Management and Election Strategy.

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