The crash on October 10 triggered the worst liquidation event in cryptocurrency history to date, which took a huge hit to the price of Bitcoin. The initial wave of the downtrend sent it towards $102,000 before recovering, but subsequent waves eventually brought the price below $100,000 for the first time in over four months. However, as cryptocurrencies look set to settle back into the market, the question of whether now is the time to buy or wait for further declines is growing louder, as answered by cryptocurrency analyst MarcPMarkets.
Why BTC is a good place to buy
To answer the question of whether this is a good time to buy BTC despite the Bitcoin price slumping in recent weeks, MarcPMarkets believes there is upside to buying BTC around $100,000. Crypto analysts explain that despite the majority still being bearish due to the decline, that doesn’t take away from the fact that Bitcoin still presents a good buying opportunity as it is in territory where a bullish reversal is possible.
One of the key factors in favor of buying BTC is the fact that the current macro environment is still highly inflationary. Given Bitcoin’s limited supply, it has emerged for some as the “perfect” edge to the endless money printing carried out by governments. Therefore, as more fiat currencies flood the market, holding BTC becomes more valuable as the price of Bitcoin is expected to rise in response.
The cryptocurrency analyst also explains that the U.S. government shutdown has created an information gap. The closure has prevented valuable information from being released to the public, and these missing reports can have a major impact on prices.
Moreover, the US Federal Reserve (Fed) has taken a more dovish stance, which is positive for risky assets such as Bitcoin. Interest rates continue to fall, raising expectations of a further decline to 3.50% to 3.75%, according to the FedWatch tool. The Federal Reserve is also expected to end quantitative tightening and enter quantitative easing in early December, creating an environment for Bitcoin prices to recover.
Bitcoin price should remain supported
Bitcoin price is not completely out of the woods yet and will need to hold key supports for a recovery. MarcPMarkets notes that there is still support at $98,000, but if the cryptocurrency fails to maintain this level, Bitcoin price will face the next support at $95,000.
However, the main level of concern is around $80,000, where a decline could mean the next bear market could begin. First of all, the analyst explains that $88,000 overlaps with the first wave and that failure to bounce back quickly from here means the Bitcoin price is in a wider corrective wave.
“We believe the broader bullish structure (wave 4) remains intact until the price overlaps the 88K of the first wave,” the analyst said. “If this level cannot be tested within this bearish attempt, it means that a wider five-wave wave is likely to follow, which could theoretically see a test of the 126K high.”
Featured image from Dall.E, chart from Tradingview.com
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