Most of the largest digital coins have gone up in price since the beginning of the year, some have even doubled in price. When is a market correction likely to start and does investing in Bitcoin remain more attractive than investing in alt-coins?
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In mid-February, Bitcoin hit a new 2020 maximum price of over $10.400, after which it entered a small decline. Now, the grandfather of cryptocurrency is tradingat $10.200, its rate has increased by more than 40% in the last month and a half. Even more impressive dynamics were shown by some altcoins. For example, the price of Ethereum has almost doubled in six weeks, now it is $260.
The correction will start soon
In the near future, the Bitcoin exchange rate may adjust to $9000-9500, suggested CEO of Xena Exchange Anton Kravchenko. He called the current value of the first cryptocurrency fair and added that in the long term it may reach $15000 due to halving. “If you see a Bitcoin for $8500-9000, you can buy it. The long-term view remains the same, it will be difficult for the cryptocurrency to be below $11,000 by the summer because of halving, and by the end of the year we can see $15,000,” predicted Kravchenko.
Co-founder of LAZM Roman Nekrasov also advised investing in BTC. He called the top 5 cryptocurrencies the most reliable in terms of capitalization and added that so far the rate of Bitcoin is in the “green zone”, but in the short term, it may return again below $9000-$10 000. “In the long term, I’m sure the price of Bitcoin will rise. Now I recommend investors, especially beginners, to be extremely cautious when buying cryptocurrency. Do not risk your last funds, diversify,” Nekrasov advised.
“The bottom is far from gone”
Sergey Mendeleyev, the co-founder of Garantex, looks more negatively on future prices of Bitcoin. He explained that according to the technical analysis of the exchange chart, the bullish trend will continue to the level of $11,400. However, the reversal will follow due to the absence of fundamental factors, Mendeleev is sure.
According to him, Altcoin prospects are even more “bleak”, as BTC’s market share has been growing for years, and 99% of digital money has turned out to be “just trash for nobody”. Therefore, the expert advised being extremely cautious in considering investments beyond the top 20 on capitalization.
“If the task is to keep the capital anonymous and reliable, it’s better to do it in stable coins like USDT, and for those who like to tickle their nerves – in BTC or ETH. In our opinion, in the long run, they will be more expensive than current values, but the bottom is still far from gone,” said Mendeleev.
Founder of the club of venture capital investors iTLeaders Egor Klopenko also believes that it is not worth buying Bitcoin now. The expert explained that the cryptocurrency is traded at the upper border and its crossing is not supported by any fundamental factors or liquidity. However, it can still break through the resistance level, as it is a speculative instrument that is subject to manipulation.
“As soon as the main holders start to come out, he’ll be back in a few days the way he’s done in recent months. If we talk about other cryptocurrencies, which have even less liquidity than BTC, we can only strongly recommend non-professional investors not to enter them and look for other instruments to invest,” said Klopenko.
Reasons for market growth and forecast
According to the head of AMarkets analytical department Artem Deyev, Bitcoin rose in price amid the crisis provoked by a coronavirus. Therefore, until the situation with the disease stabilizes, the first cryptocurrency will grow in price, adding another 35-40% in the future.
Vladislav Antonov, an analyst of Alpari Information Center, also stated about the risks of buying cryptocurrency at current levels. He suggested that from February, 16th the market may begin a downward correction, which will last until March, 5th. It is better to consider the possibility of buying the asset after this date, the expert advised.
Valery Petrov, vice-president of RAKIB, is also confident in the rapid correction of the cryptocurrency market. The only chance to break through the threshold of $10500 is a significant increase in liquidity inflow, said the expert. However, judging by the current trading on the leading stock exchanges, investors who came to the market during the previous month, prefer to fix profits, while the inflow of new funds and bullish moods are gradually dwindling, added Petrov.
No need for long-term investments
“However, if institutional or large investors decide to further disperse Bitcoin, then at the current market volume it is quite possible for them. Then in case of breaking through the threshold of $10500, the next significant resistance level will be $12000. The main altcoins, such as ETH, BCH, LTC, and IOTA are in the fairway of Bitcoin and the correlation between changes in the price of altcoins and Bitcoin is now quite high, so it makes no sense to consider them as a separate investment object,” explained Petrov.
In his opinion, it is not reasonable to make any long-term investments in Bitcoin at the moment before the beginning of a long-term trend, when the price of the cryptocurrency will be above $10500 and close to $11000. Most experts believe that it is not worth buying the first cryptocurrency now, as its price may correct in the near future. However, experts say that then, in the long term, the asset will become more expensive. Analysts call halving the main driver of Bitcoin growth, which will be held in May this year.
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First published in РБК, a third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.
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