Bitcoin accumulates a rise of more than 30% so far this year. A respite for its investors after a black 2022, in which it fell 60% in full change of trend in the markets, less prone to risk. What’s behind? Is it the start of something else after the doubts due to the bankruptcy of FTX?
There are several factors for the rebound. “The fear of attending a cleaning has been felt. But confidence in the health of the system is recovering again,” says Javier Molina, senior market analyst for eToro. “It benefits from the return of the investor, who sees that there will not be such a hard recession and that the rise in rates has slowed down,” he continues. With a change in vision and a greater propensity for risk, volatile options such as bitcoin “recover strongly, with rising volumes,” Molina completes.
The sector comes from a busy few months. The rise in rates and the change in monetary policy had drained funding from markets, less prone to risky alternatives, and punished cryptocurrencies. The bankruptcy of FTX, the domino effect in other firms, the stock market crash of Coinbase… One cross after another. “The fall of Genesis seems to indicate that the worst is over…”, he analyzes. And there is a certain return from institutional investors, which together with the pull effect among retail investors pushed it to all-time highs ($69,000) in 2021. “We are at the beginning of a slight rebound in interest, it can be seen with the movements in the large wallets (virtual wallets).
With the Chinese reopening in the background and confidence revived, “we see a return to risk appetite in the markets and just as equities rise and especially those values ??that had lagged further behind, cryptocurrencies are pointing to the car”, says Antonio Castelo, an analyst at iBroker. “Investors have found the possibility of obtaining important and quick profits, especially with bitcoin, which is the crypto that offers the greatest security,” he argues.
Regarding what the future holds, caution reigns. “You have to be prudent and take the general picture into account. Although it is back above 20,000 for the first time since the bankruptcy of FTX -the 5,000 million recovered by the platform may have been interpreted as a positive sign-, they are still valid several elements, such as the uncertain geopolitical landscape and the activism of central banks, which could slow down the recovery”, assesses Mireya Fernández, head of growth at Bitpanda Spain.
Just as there are strong rises, bitcoin has become accustomed to strong falls. Castelo points out as a factor to watch “a return to the loss of appetite for risk, something that we do not rule out because the economic and monetary risks are insufficiently assumed.” In other words, that investors once again discard risk and opt for safer options, such as the dollar, and put crypto aside. The other key point is regulation, if it continues to be tightened to increase control and transparency. “It is an industry that was born precisely to avoid regulation. It is likely that if it is regulated it will not be able to survive,” he ventures, because it would lose its meaning and would have no advantages over traditional financial institutions.
From a technical point of view and to anticipate what can happen, Molina puts 18,000-18,500 dollars as the first floor. Above, he is aiming for $24,000-24,200: breaking that level “could indicate that there is a change, that it is not just a bounce and there is something more.”
Although the market has normally gone in unison and the rest of the cryptocurrencies increase their value with bitcoin, “there will be a separation between those that add value or not, which denotes maturity in the ecosystem, investors are learning,” says Molina .
With the current trend, is it an opportunity to invest? “The moment is not as important as understanding the product. If you decide that bitcoin is an interesting product for you, today it is 35% cheaper to invest in it than it was a year ago and three times cheaper than at highs. If you understand the asset and you think it has the potential for revaluation, the resounding answer is a yes”, says Fernández. The strategy is to go small, “a little today, a little next month” to reduce volatility spikes.
Others are much more reluctant. “You have to know and know the business if you want to invest and be prudent. It is pure speculation,” Castelo warns.