Regardless of the barriers that Bitcoin (CRYPTO: BTC) has broken down, this will be a highly resisted asset… until it will no longer be so. The retail investor and, of course, the outsiders, will continue to fear the drop in the Bitcoin’s price instead of taking this as an opportunity because that is how human nature works whenever the value of something is unknown; and certainly, when this pushes upwards, people will regret not having invested in it.
The current scenario is extremely positive and the reason is the following: Let’s begin with its fundamentals: Bitcoin is already an institutional financial asset, its capitalization is reaching the trillion dollars, thus positioning itself within the assets with the highest capitalization of all markets and time.
For that matter, a country is already installing geothermal fields using the energy of its volcanoes to produce Bitcoin and declared it a national tender.
The SEC is adjourning the approval of Bitcoin ETFs until they deem it the most convenient time for them, but it will eventually become a reality. Taproot, the upcoming big Bitcoin update, will arrive next month, granting it the ability to execute Smart contracts, significantly increasing the value of this asset, since its functionality and utility will be greater.
And, by all means: its limited supply, and it’s no longer so accessible but still a decentralized issuance system. Something very peculiar about this is that before China banned its miners last June, that country had more than 60% of the mining equipment, making it centralized. However, this banning by the government led the asset to have its mining decentralized again.
This peculiarity highly differs from the banking system, taking as an example the Federal Reserve, which during the last two years has issued more than 38% of the historical monetary base, fully adjudicating a decision that impacts directly on the economy of its people.
In addition, its Chair exposes constant incompetence, by labeling inflation as “Frustrating”. But it is not to blame entirely; this is the result of more than 50 years of malpractice, where the US dollar has been devalued by more than 98%.
As long as the central banks (with spotlight on the FED) continue with their quantitative easing policies and increase the debt ceilings and further atrocities that are taking place, Bitcoin will get stronger, because it is in its nature. It was literally created to avoid bankruptcies and bring transparency to the financial system. Furthermore, it has a negative correlation with the DXY.
Nevertheless, Bitcoin is still very vulnerable to negative events in the short term regardless of which market we refer to. The most recent example is the Evergrande effect. Some label the BTC an unstable asset for this reason, we prefer to label it as an asset that is reaching the consolidation in the market, since it has not even been in it for 15 years yet. Each price drop that occurs due to some event unrelated to the asset itself is an opportunity to buy value at a discount.
Now let’s discuss its price:
Bitcoin loves to dance by seducing the euphoric feelings and cheating the naive. When the consensus was subdued in the bullish euphoria, there was a bear trap at 60k that later dropped heavily by 50%. Afterward, when the whole consensus was in a panic of falling to 20k or even 10k, Bitcoin made a beautiful throwback to the 30,000 zone to reach almost unchecked to 50k. When the consensus relaxed and accepted that Bitcoin was going to be on the rise again, the great “Sell The News” event of El Salvador occurred, and timely news appeared to make the price drop a little more. In our case, we were able to foresee how to act and warned our students of all these movements.
What we see now is a massive consensus on Bitcoin, which coincides that it should fall to the 38-35K zone. That is where the consensus awaits it. And as we have recently analyzed, Bitcoin dances to consensus, so this should not happen and the order block in the 40,000 zone confirms it. To our own appreciation, we expect a strong upward movement.
In short, the scenario seems bullish Bitcoin, there are no reasons not to be buying, leveraging the general fear. The Taproot event and Bitcoin ETFs should be enough for it to reach 100,000 USD.