Is it still worth buying Bitcoin? Analyst says yes – even after a record high
Bitcoin has become too expensive for many to buy after spiking above $ 37,500 this Thursday. But the cryptocurrency still offers attractive buying opportunities with a lower risk profile.
TradingShot’s investment advisors created a fractal-based outlook on Bitcoin’s previous parabolic movement in 2017 and the price corrections that occurred during that period. They discovered buying patterns around certain technical support levels – formed by a group of moving average waves – that sent prices to new highs after each retest.
What’s up with Bitcoin fractals?
In retrospect, during its bull run in 2017, Bitcoin corrected four times by 30 percent, three times by 20 percent, twice by 18 percent and once by 40 percent. Meanwhile, the cryptocurrency resumed its uptrend three times after testing its 100-day moving average and twice after hitting the 50-day moving average.
Bitcoin’s bull run in 2017 saw a series of upward moves and pullbacks. Source: BTCUD on TradingView.com
The TradingSpot strategists compared the 2017 bull run to the current one as the volatility and price returns are exponential. Just like in 2017, Bitcoin ( How to buy Bitcoins with instant transfer instructions) experienced an increase of up to 880 percent in value and market capitalization between March 2020 and the current month.
And most recently, the cryptocurrency resumed its upward trend after falling 20 percent from its then record high of $ 34,800.
On January 7th, the BTC / USD exchange rate hit a new record high of $ 37,823.
„It should [should] come as no surprise that [traders] bought the 20 percent pullback,“ a note from TradingShot said. „Based on the previous cycle, the odds were good.“
„Buy the dip“
According to the analysis, traders could prepare to buy Bitcoin – even if its price corrects by 30 percent from current levels. Such a move would land the cryptocurrency at the 50-DMA. In the meantime, a 40 percent drop in BTC / USD would have the 100-DMA tested.
„This is just to show [that] if you are a buyer, don’t panic and have the composure to buy them [price collapses],“ the note said.
Institutional investors have only just increased their exposure to the Bitcoin market. Data from CryptoQuant, a blockchain analytics platform, shows that mainstream investors bought the cryptocurrency for up to $ 30,000 on Jan. 2 – suggesting a long-term upward trend.