The Bitcoin Bottom – Are We There Yet? Analysts Discuss Factors Influencing BTC Price – Cointelegraph | Jewelry Dukan

As Bitcoin (BTC) traded above $60,000, the smartest analysts and financially conscious folks told investors that BTC price would never fall below its previous all-time high.

The same people also said that $50,000 was a buy-the-dip 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 great time to buy the dip, and one might think that buying BTC at or below $10,000 would also be the buy of a lifetime. But now all the so-called “experts” have fallen silent and are nowhere to be seen or heard.

So investors are left to their own devices and minds to think about whether the bottom is in or not. Should one be patient and wait for the crash to $10,000 prediction or is now the time to buy bitcoin and altcoins?

In general, calling price lows is a futile task. It’s really important to focus on whether there are fundamental reasons behind the decision to invest in Bitcoin or not.

Sure, the price has changed drastically, but have bitcoin’s network fundamentals and the infrastructure surrounding bitcoin as an asset improved or deteriorated? It’s important to grow this data because investors should get their confidence and investment thesis here.

This is exactly why Cointelegraph has one Twitter Spaces with analysts Joe Burnett from Blockware Solutions and Colin Harper from Luxor Mining. Here are a few highlights from the conversation.

The stock markets will decide when the bitcoin price can “bounce back”.

According to Blockware Solutions analyst Joe Burnett, Bitcoin price is heavily influenced by Federal Reserve policies and their impact on stock markets. burnet said:

“The macro environment is obviously weighing heavily on Bitcoin’s price. High CPI inflation has led to an aggressive Fed since November 2021. Higher interest rates will inevitably cause all assets to decline. Interest rates are basically gravity on financial assets, basically just a discounted cash flow analysis. And these rising interest rates are an attempt by the Fed to destroy demand and inflation. It’s obviously putting pressure on all risky assets, including bitcoin.”

When asked about the bitcoin hash bands on-chain indicator suggesting that BTC had bottomed and miners had capitulated to confirm the bitcoin bottom was in, Burnett said, “I think with any kind of like-on-chain type metric you definitely have to take it a grain of salt. You can’t look at it in a vacuum and say yes, the bitcoin bottom is there.”

burnet said:

“If US stocks make new lows, I expect Bitcoin to follow. That being said, if you look at the fundamentals of bitcoin itself, I think minor caps typically mark bitcoin bottoms. And a hash-driven indicator that Charles Edwards created basically shows that there was a miner capitulation this summer.”

Related: Canaan exec says opportunity outweighs crisis as bitcoin miners grapple with shrinking profits

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

Discussion of the growing partnership between big utilities, oil and gas companies, and industry-size Bitcoin miners has been a hot topic throughout 2022, and when asked about the direct benefits of this relationship to Bitcoin itself, Colin Harper said:

“I don’t think mining is doing anything bad or good for bitcoin. I think it’s good for bitcoin in the sense that in the long run it will strengthen network security, decentralize mining, and deploy it practically anywhere in the world as energy producers mine it. But as for the price, I think this is just kind of a broader adoption case. And whether or not people will use it daily as a medium of exchange, a store of value, and just a general investment.”

Harper elaborated, “When these companies start mining it, it becomes tastier. It’s less stigmatized. Depends on that, I guess, the oil producer and that person’s politics.”

When asked what mass adoption of Bitcoin might look like in the future in terms of mining industry growth, Harper stated the following:

“It will only be a matter of time before they start integrating Bitcoin into their stacks. And I think that’s when things get interesting in terms of mining as an industry, because when you have the producers of the energy and the people who own the energy mining bitcoin, then that makes it very difficult for people without those assets, eventually making a profit because you will see the hash price already trading in backwardation. Finally, can you envision a future where only energy producers and those invested in or embedded in energy producers can actually make a profit from their bitcoin mining.”

Regulation and a growing desire for self-custody will fuel the growth of the Bitcoin Lightning Network

Both analysts agreed that the growth potential for layer 2 bitcoin is high, although it may take a few years. Burnett predicted that “over time, more and more people will learn to require final accounting of their bitcoin, which means more people will own their own keys.”

According to Burnett:

“If bitcoin adoption grows 100x or 1000x, there will be a lot more competition for scarce block space and on-chain fees will likely go up just because people will be asking for a lot more processing, by orders of magnitude more Processing on the base layer. However, the block space for deposition on the base layer is fixed. Basically, these escalating on-chain fees will potentially lead to lightning fast channel liquidity that is already open and available, in my view. It will make it more valuable.”

Harper wholeheartedly agreed, adding that he believes the Lightning Network is “going to be the thing that will allow Bitcoin to be used as a global medium of exchange and also, as Jack Mallers put it, it’s the thing that… Bitcoin can somehow separate, the asset of Bitcoin, the payment network in a way that is actually scalable.”

Tune in here Listen for the full conversation in the Twitter Space.

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