Predicting the price of Bitcoin is notoriously difficult – the world’s most valuable cryptocurrency can make moves of 10% or more in either direction without any obvious catalysts. Even though there’s no way to be completely sure of what Bitcoin’s next move will be, there’s a whole host of indicators that can help us make an educated guess.
Technical indicators and market sentiment can forecast short-term Bitcoin price moves
Bitcoin is currently priced at just under $44,100. According to a Bitcoin price prediction from CoinCodex, the cryptocurrency could reach $52,670 by February 20. The prediction is informed by several factors. This includes a range of moving averages, which represent important price levels on different time-frames. Some moving averages are used to predict short-term price fluctuations, while others are focused on long-term forecasts. The prediction also takes into account popular indicators like MACD (Moving Average Convergence Divergence) and RSI (Relative Strength Index).
There’s also the Fear & Greed index, which is a gauge of investor sentiment. If the sentiment is heavily slanted towards “Greed”, this could mean that the market is overheated and due for a price correction. A strong “Fear” reading, on the other hand, can suggest that there’s currently a good buying opportunity.
Bitcoin traders often pay attention to chart analysis patterns like ascending and descending triangles, head & shoulders, and price channels. However, this type of chart analysis is a skill that’s difficult to neatly sum up into a “buy” or “sell” signal.
Long-term Bitcoin investors see it as a digital alternative to gold
When most people look at Bitcoin, they don’t see it as something that they would actively trade based on short-term price moves. Instead, it’s more commonly perceived as an investment to be held passively. This is why it’s important to also consider also important to consider the big picture of why so many successful investors consider Bitcoin to be a solid long-term investment. Bitcoin’s supply has a hard cap of 21 million coins, which will be reached in 2140 according to estimates. Currently, the available supply of Bitcoin is still expanding, but it’s crucial to highlight that this is happening at a completely predictable pace. Bitcoin’s predictable supply dynamics and the network’s strong security has led many investors to call Bitcoin a store of value and a digital counterpart to gold.
Analysts at banking giant JPMorgan have stated that $150,000 is a theoretical long-term price target for Bitcoin. At such a price, the market capitalization of Bitcoin would rival the amount that’s privately held in gold as an investment. It’s not just JPMorgan’s analysts that see potential upside in Bitcoin, but also its clients. According to a survey conducted by JPMorgan in January 2022, 55% of the bank’s clients expected the Bitcoin price to be $60,000 or higher by the end of the year.
Six-figure price targets for Bitcoin might seem ambitious, but it’s easy to underestimate just how much the Bitcoin market has grown since the cryptocurrency was unveiled to the world in 2008. While Bitcoin once used to be an obscure investment, some of the world’s most famous money managers are now getting on board.
Bill Miller, a billionaire investor who rose to fame by beating the S&P 500 for 15 consecutive years, says he views Bitcoin as an insurance policy against financial catastrophe. Miller’s bet on Bitcoin and related investments like cryptocurrency mining companies have been so successful that they grew to represent 50% of his personal assets.
Ricardo Salinas Pliego, currently the third-richest person in Mexico, has taken an even stronger pro-Bitcoin stance. Salinas Pliego has called Bitcoin “the new gold” and argued that investors should buy it to protect themselves against massive money printing by central banks. His bank Banco Azteca also had plans to accept Bitcoin, although Mexico’s central bank responded by saying that cryptocurrencies are prohibited from being used in the country’s financial system. Will the continued success of Bitcoin eventually force the world’s central banks to change their tune?
