The largest cryptocurrency in the world is once again experiencing a difficult period. While the Bitcoin (BTC) price was still at $ 126,000 at the beginning of October, it dropped to $ 82,175. BTC has now fought back to its current level in small steps. The fear among investors is clearly palpable. Yet one analyst now calls those concerns “exaggerated.”
Bitcoin price drops, fear increases
The Norwegian research agency K33 recently published its “December Outlook”. According to lead researcher Vetle Lunde, the current unrest in the market is mainly fueled by concerns about the long term. Consider the rise of quantum computing, which would theoretically be able to crack the access codes of crypto wallets.
Another commonly mentioned fear is that Michael Saylor’s company Strategy may sell Bitcoins from its vast reserves. According to K33, this is unlikely, and the panic in the market is mainly based on speculation.
The research agency mainly attributes the recent declines to two causes: the high number of open derivatives positions and the selling pressure from long-term holders. Due to price falls, stop losses were hit en masse, further accelerating the decline.
In addition, capital also flowed out of Bitcoin exchange-traded funds (ETFs). Red figures showed that institutional investors temporarily lost confidence in a quick recovery.
Positive signals for BTC forecast
However, K33 sees opportunities for a recovery of the Bitcoin price in the medium term. For example, a relaxation of rules for pension accounts is on the agenda in the United States. That would make it easier to also invest in BTC with those types of accounts.
Moreover, momentum is growing for more crypto-friendly policies. The US Securities and Exchange Commission (SEC) recently simplified the approval process for altcoin ETFs. According to K33, this combination of factors could create a favorable scenario for Bitcoin.
Source: https://newsbit.nl/bitcoin-herstel-in-zicht-deze-zorgen-zijn-volgens-analist-onterecht/
