Analysts Discuss Factors Affecting BTC Price

Analysts Discuss Factors Affecting BTC Price
Analysts Discuss Factors Affecting BTC Price

When Bitcoin was trading above $60,000, the smartest analysts and financially minded people told investors that the price of BTC would never fall below its previous all-time high.

These same individuals also said that $50,000 was a downside buy opportunity and then said $35,000 was a generational buy opportunity. Later, they also suggested that BTC would never fall below $20,000.

Obviously, “now” is a great time to buy the dip, and one would think that buying BTC for $10,000 or less would also be the buy of a lifetime. But now, all the so-called “experts” have gone quiet and are nowhere to be seen or heard.

So investors are left to their own devices and thoughts to contemplate whether or not the fund is in. Should one be patient and wait for the forecast to “fall to $10,000” or is it now time to buy Bitcoin and altcoins?

Generally, calling price funds is a useless task. What is really important to focus on is whether or not there are fundamental reasons to choose or not to invest in Bitcoin.

Sure, the price has changed dramatically, but have the fundamentals of Bitcoin’s network and infrastructure around Bitcoin as an asset improved or degraded? It is important to expand on this data because, for investors, this is where their confidence and investment thesis should be sought.

This is exactly why Cointelegraph organized a Twitter Spaces with Analysts Joe Burnett of Blockware Solutions and Colin Harper of Luxor Mining. See some highlights of the conversation.

Stock Markets Will Decide When Bitcoin Price Can “Rise Again”

According to Blockware Solutions analyst Joe Burnett, the price of Bitcoin is heavily impacted by Federal Reserve policy and its impact on equity markets. Burnett said:

“The macro environment is obviously weighing heavily on the price of Bitcoin. High CPI inflation has led to an aggressive Fed since November 2021. Higher interest rates inevitably cause all assets to fall. Interest rates are basically the severity of financial assets, just basically the discounted cash flow analysis. And these rising interest rates are an attempt to destroy demand and inflation by the Fed. Obviously, it is putting pressure on all risky assets, including Bitcoin.”

When asked about the Bitcoin hash ribbons on-chain indicator, suggesting that BTC has bottomed and miners capitulated, confirming that Bitcoin’s bottom was, Burnett said: “I think with all sorts of chain-type metrics, you definitely have to accept a grain of salt. You can’t look at this in a vacuum and say, yes, the bottom of bitcoin is inside.”

Burnett said:

“If US equities make new lows, I certainly expect Bitcoin to follow. With that said, I mean, if you’re looking at the fundamentals of Bitcoin itself, I think smaller capitulations typically mark Bitcoin’s bottoms. And a hash indicator created by Charles Edwards is basically showing that there has been a capitulation of miners this summer.”

Related: Canaan Executive Says Opportunity Outweighs Crisis as Bitcoin Miners Struggle with Shrinking Profits

Synergy between Big Energy and Bitcoin miners is a positive net result for BTC

Discussion of the growing partnership between major energy providers, oil and gas companies and industrial-sized Bitcoin miners has been a hot topic throughout 2022 and when asked about the direct benefits of this relationship with Bitcoin itself, Colin Harper said:

“I don’t think mining does anything bad or good for Bitcoin. I think it’s good for Bitcoin in the sense that in the long run it’s going to strengthen the security of the network, decentralize mining and put it like basically every corner of the globe if you have energy producers mining. But in terms of really doing anything with the price, I think it’s just kind of a broader adoption case. And whether or not people are going to use it on a day-to-day basis as a medium of exchange, a store of value and just general investment.”

Harper elaborated with: “If these companies start mining, then it will become more palatable. It becomes less stigmatized. Depending, I think the oil producer and the policy of that person.”

When asked what mass adoption of Bitcoin will look like in the future, in relation to the growth of the mining industry, Harper explained that:

“It will only be a matter of time before they start integrating Bitcoin into their stacks. And I think that’s where things get interesting in terms of mining as an industry, because if you have the energy producers and the people who own the energy mining Bitcoin, then that makes it very difficult for people without those assets to eventually make a profit. . because you will see the hash price, which is already traded in retracement. Eventually, you can envision a future where only energy producers and those who invest in or are embedded in energy producers can actually profit from their bitcoin mining.”

Regulation and a growing desire for self-custody will drive the growth of the Bitcoin Lightning Network

Both analysts agreed that while it may take a few years, the growth potential of layer 2 Bitcoin is brilliant. Burnett predicted that “over time, more and more people will learn to demand final settlement of their Bitcoins, which means more people will have their own keys.”

According to Burnett:

“If Bitcoin adoption grows 100x or 1000x, there will be a lot more competition for scarce block space and on-chain fees will likely go up just because people will demand a lot more settlement, magnitudes more settlement at the base layer. But the space of the block to settle on the base layer is fixed. So these chain rate increases will basically, in my opinion, potentially make the lightning channel liquidity that is already open and available. It will make you more valuable.”

Harper agreed and added that, in his view, the Lightning Network “will be what allows Bitcoin to be used as a worldwide medium of exchange and also, as Jack Mallers put it, is what can separate Bitcoin, the asset from Bitcoin, the payments network in a way that is really scalable.”

tune in here to listen the full conversation from Twitter Space.


Disclaimer. Cointelegraph does not endorse any product content on this page. While we aim to provide you with all the important information we can get, readers should do their own research before taking any action related to the company and take full responsibility for their decisions, nor can this article be considered investment advice.

The article is in Portuguese

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