With an asset as volatile as Bitcoin, it’s easy for investors to frequently fret about ever-changing prices, and with the largest digital currency slumping over the past couple of weeks, those concerns are even more relevant.
However, some crypto market analysts believe there are fundamental and technical reasons the crypto giant can continue delivering upside.
“Returns after prior bitcoin options expiration dates have tended to be positive,” David Grider, strategist at Fundstrat, told clients in an email. “The market is calm based on bitcoin VIX [a volatility index]falling, with room to fall further.”
Bitcoin is in a bit of a slump, but it remains a compelling asset and one that’s garnering increasing attention in the professional investment community. Pros are also casting a wide net when it comes to forecasting the cryptocurrency’s price.
“There is simply too much BTC supply in search of yield relative to institutional demand for that BTC,” wrote Matthew Ballensweig, head of lending at Genesis Trading, in a March 24 tweet. “There are limited ways to deploy BTC right now, and thus the glorified 4%-6% yields on BTC are contracting fast.”
The Latest on Bitcoin
Amid low global interest rates and central bank debasement of fiat currencies, Bitcoin is becoming a go-to asset for some high-level investors and companies.
“An oversold signal on Thursday preceded in a near 8% rise in bitcoin,” reports Damanick Dantes for CoinDesk. “The next level of resistance is around $55,000-$56,000 which could limit upside moves. Previous oversold signals on the hourly relative strength index (RSI) resulted in 5%-8% price recoveries. However, sellers have been active at key resistance levels this month.”
Institutional investors are playing an increasingly prominent role in the Bitcoin market, and that role is likely to continue growing.
Cryptocurrencies remain largely unregulated, which has deterred many potential investors. The Securities and Exchange Commission has so far rejected exemptive relief for any attempt to roll out a Bitcoin ETF, arguing that there is not enough protection against fraud and market manipulation in the cryptocurrency market. However, many institutional investors are moving past those concerns and embracing Bitcoin in a big way.
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The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.