The latest monthly Consumer Price Index (CPI) data released on January 12, 2022 gave bitcoin relief.
Although the figure is down to a monthly increase of 0.5%, it remains high and calls for attention. Due to the data, Bitcoin price rose 2.65% to $43,800, while Ethereum price gained more than 4% to $3,400. Meanwhile, stock markets have recovered slightly.
Analyst Believes BTC Could Hit $75,000 Soon
Over the past two weeks, bitcoin and major altcoins have crashed more than 10%, sparking widespread fear among investors. Just a month ago, analysts were still making bold predictions that bitcoin could hit $100,000 in 2022.
The recent crashes have clearly burst some bubbles and invited more gloomy or realistic predictions. Even so, Seba Bank CEO Guido Buehler estimated that bitcoin could soon hit $75,000.
“Our internal valuation models indicate a price currently between $50,000 and $75,000,” Guido Buehler said on January 12. “I’m pretty confident that we’re going to see this level. The question is always the timing. At the same time, the CEO warned that volatility remains high in the bitcoin market.
A cross of death to come?
However, despite the slight rebound, the market is still in extreme fear, with the Fear and Greed Index pointing to 21. Any price drops or further bearishness could induce further selling. On the daily chart, bitcoin is poised to form a classic death cross, usually indicating a downtrend.
According to Investopedia, “a death cross is a technical chart pattern indicating the potential for a sell-off.” This happens when a short-term moving average (in this case, the 50-day MA) crosses below a long-term moving average (the 200-day MA). A death cross usually occurs when purchasing power is low and liquidity is low – perfect opportunities for bears to push the price down.
Meanwhile, bitcoin continues to be impacted by governments and regulations. For example, Kosovo announced on January 4, 2022 that bitcoin mining would be banned due to the energy crisis. Indeed, the energy crisis is brewing strongly on a global scale, particularly in Europe.
Tensions with Russia, which supplies a third of Europe’s natural gas, are driving up the price of gas, which could pose a challenge to bitcoin mining, notorious for its high energy consumption. Also, Pakistan has decided to issue a blanket ban on cryptocurrencies. All of these factors could cause panic in the market.
How to prepare for market fluctuations?
It looks like the next few weeks will be tough and wild for bitcoin. In times of uncertainty, a good way to survive is to diversify our strategies and portfolios. It is important to determine your risk tolerance and only invest the money you can afford to lose. Here are two options worth considering.
Option 1: A wallet designed for traders and hodlers
An interest wallet is a safe haven to store your bitcoins. With up to 21% annualized interest, you can grow your wealth without taking the risk of trading. You can withdraw your deposit at any time or instantly transfer the bitcoin to the trading account.
Option 2: Manage trading with lower risk
Futures trading allows traders to make profits regardless of the direction bitcoin is going. By predicting good Bitcoin price trends, traders can achieve greater returns in a shorter time frame. Additionally, 100x leverage is used to maximize traders profits.
Suppose we used 1 BTC to open a short contract while bitcoin was trading at $45,000. Please note that with 100x leverage, 1 BTC can open a contract worth 100 BTC.
When bitcoin price fell to $40,000. The profit will be ($45,000 – $40,000) * 100 BTC / $40,000 * 100% = 12.5 BTC. This means that we made a profit of 12.5 BTC with only 1 BTC!
Bexplus offers 100x leverage on BTC, ETH, DOGE, ADA and XRP futures. No KYC is needed and it is available for traders from the United States. If you are a beginner, the demo account is really useful for you to improve your trading skills in a real environment without worrying about losing money.
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