Author: Joshua Aldio, Business Associate Tokenomy
Disclaimer: Tokenomy does not provide any investment, financial, accounting, valuation, tax, legal or other professional advice. The opinions expressed in the article is the author’s personal view only. All decisions to buy, sell or trade any Digital Asset using the Services are made solely by you, and you are fully responsible for all such decisions.
After a rocky start to the year, Bitcoin (BTC) appears to have stabilized this week, and some analysts predict that prices are set to rise. Bitcoin has grown 1% since Sunday after dropping almost 12% in the first week of 2022. Compared with the first week of 2021, when Bitcoin gained 15% and traded above $50,000, this week’s move looks small, but experts say this might be a turning point in the market.
Prices are likely to rebound from the current level around $42,000 though will remain between $40,000-$60,000, said Gavin Smith, CEO of Panxora. “This would set Bitcoin up for a move to new highs later in the year,” he said. “We predict the catalyst for this move to be stubbornly high inflation numbers coupled with a continuation of negative real interest rates.”
A “real” interest rate is adjusted for inflation, so when the figure is negative, it means that consumer prices are rising faster than benchmark bond yields. The dynamic – a function of ultra-loose monetary policies put in place by central banks around the world – encourages risk-taking since investors are effectively losing value by holding bonds and other fixed-income instruments.
Bitcoin Technical Analysis
Bitcoin is falling towards $40,000 which the graph indicates is a strong support-demand area, confirmed by the 1.618 Fibonacci ratio that may cause a reversal from bearish to bullish movement. The target price will be around $50,700 as the Fibonacci 38.2 ratio indicates.
The weekly chart shows Bitcoin has remained bullish with the Elliott Wave perspective. The Bitcoin price is now moving in the 4th wave and will soon create the 5th, aiming toward $80,000. It is a good time to buy Bitcoin.