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The Bitcoin bottom — Are we there yet? Analysts discuss the factors impacting BTC price

The Bitcoin bottom — Are we there yet? Analysts discuss the factors impacting BTC price

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When Bitcoin was trading above $60,000, the smartest analysts and financial minds told investors that the BTC price would never fall below its previous all-time high.

These same people also said a $50,000 buying opportunity, and then they said $35,000 was a generational buying opportunity. Later, they also suggested that BTC would never fall below $20,000.

Of course, “now” is a good time to buy the dip, and you’d think buying BTC at $10,000 or less would also be a lifetime buy. But so far all the so-called “experts” have gone silent and are nowhere to be seen or heard from.

So investors are left to their own devices and thoughts to ponder whether the bottom is in or not. Should we be patient and wait for the “drop to $10,000” forecast or is now the time to buy Bitcoin and altcoins?

In general, calling the price base is a pointless task. It is really important to focus on whether or not there are fundamental reasons for choosing to invest in Bitcoin.

Sure, the price has changed dramatically, but have the fundamentals of the Bitcoin network and the infrastructure surrounding Bitcoin as an asset gotten better or worse? It is important to bring this information together as this is where investors should source their trust and investment research.

It is for this reason that Cointelegraph hosts a Twitter Spaces with analysts Joe Burnett of Blockware Solutions and Colin Harper of Luxor Mining. Here are some highlights from the conversation.

The stock market will decide when the price of Bitcoin can rise again

According to Joe Burnett, an analyst at Blockware Solutions, the Federal Reserve’s policy and its impact on the stock market strongly influence the price of Bitcoin. Burnett said:

“The macro environment is naturally weighing heavily on the price of Bitcoin. High consumer price inflation has led to an aggressive Fed since November 2021. Higher interest rates will inevitably cause all assets to fall. Interest rates are basically the weight of financial assets, just basically a discounted cash flow analysis. And these rising interest rates are the Fed’s attempt to destroy demand and destroy inflation, which naturally puts pressure on all risk assets, including Bitcoin.

When asked about Bitcoin’s hash tape chain pointer suggesting that BTC had bottomed out and miners surrendering to confirm that Bitcoin’s bottom was in place, Burnett said, “I think with any on-chain type of measurement, you definitely have to take it with a grain of salt. You can’t look at it in a vacuum and say: yes, the bottom of bitcoin is inside.

Burnett said:

“If U.S. stocks make new lows, I certainly expect Bitcoin to follow. That being said, I mean if you look at the fundamentals of Bitcoin itself, I think small concessions typically mark Bitcoin’s bottom. And the hash indicator created by Charles Edwards basically depicts that this summer there was a small surrender.”

Related: Canaan exec says opportunity to weigh more on crisis as Bitcoin miners grapple with shrinking profits

The synergy between Big Energy and Bitcoin miners is a net positive for BTC

Discussion of the growing partnership between major energy suppliers, oil and gas companies and industrial-scale Bitcoin miners has been a hot topic throughout 2022, and when asked about the direct benefits of this relationship for Bitcoin itself, Colin Harper said:

“I don’t think mining does anything bad or good for Bitcoin. I think it’s good for Bitcoin in the sense that it actually strengthens network security in the long term, decentralizes mining and puts it like basically every corner of the world if energy producers mine it. But what about the price , I think it’s just kind of a case of wider adoption, and whether or not people use it on a daily basis as a medium of exchange, as a store of value, and just as a general investment.

Harper elaborated, “If these companies start mining it, it becomes more palatable. It becomes less stigmatized. Depending, I guess, on the oil producer and that person’s politics.

When asked what mass adoption of Bitcoin could look like in the future in relation to the growth of the mining industry, Harper explained that:

“It’s only a matter of time before they start integrating Bitcoin into their stacks. And I think that’s when things get interesting in the mining industry, because if you have energy producers and people who own the energy mining Bitcoin, then it’s going to be very difficult for people who don’t have those funds to make a profit in the end. because you see the hash price already trading backwards. Ultimately, you can envision a future where only energy producers and those invested in or embedded in energy producers can actually make a profit from mining bitcoin.”

Regulation and a growing desire to self-manage drive the growth of the Bitcoin Lightning Network

Both analysts agreed that while it may take a few years, the growth potential of Layer 2 Bitcoin is bright. Burnett predicted that “over time, more people will learn to demand final payment for their Bitcoin, which means more people will hold their own keys.”

According to Burnett:

“If the adoption of Bitcoin grows 100x or 1000x, there’s going to be a lot more competition for scarce block space and the fees on the chain will probably go up just because people are going to demand a lot more settlement, an order of magnitude more settlement at the base layer. But the block space to settle on the base layer is fixed. So these rise chain payments basically, I think, make possible the lightning channel liquidity that’s already open and available. That makes it more valuable.”

Harper completely agreed, adding that he thinks the Lightning Network “is the thing that enables Bitcoin to be used as a global medium of exchange, and as Jack Maller has put it, it’s the thing that can kind of set Bitcoin apart. , Bitcoin’s asset, a payment network in a truly scalable way.”

Turn here to listen For the full conversation on Twitter Space.

Disclaimer. Cointelegraph does not endorse any of the product content on this page. While we strive to provide you with all relevant information we can obtain, readers should do their own research before taking any action related to the company and take full responsibility for their decisions, and this article should not be considered investment advice.