Why I'm Still Very Bullish About Bitcoin
Let's face it, financial markets are in turmoil. It seems day after day prices keep going lower, with no possible end in sight. While the stock market had seen perhaps its greatest bubble the last few years while the money printer was turned on during the covid pandemic. That bubble is now bursting and stocks are plummeting to levels below where they were when covid first began. It is estimated that 14% of the world's wealth has been erased throughout the last several weeks due to the downturn in markets. Talks of the world entering a huge recession that will take years to recover from have been prevalent, and I tend to agree with that.
Bitcoin and crypto have been no different. Since November of 2021 when bitcoin reached a new all-time high price of $69k, it seems that the crypto market has been on a constant movement downwards. With bitcoin now ranging between $28-$29k. Many of the top analysts in the space have declared that bitcoin and crypto has officially entered a bear market. And just like other traditional financial markets, it could be years before the crypto industry recovers and becomes bullish again. This was all capped off last week when the whole Terra Luna/UST took place. It was the final nail in the coffin that sent bitcoin to levels that we hadn't seen since late 2020. Many pundits have claimed that the Luna/UST situation set crypto back years in its development. It is too soon to tell if that is the truth. With all of that said however, with everything that has taken place and where bitcoin is standing today price wise. This has me feeling more bullish than I have in a long time. Let me tell you why you should also be looking at this situation in a bullish way.
First things first. This is by no means financial advice, and it is possible that bitcoin could drop further. The truth is that no one knows for sure what will happen. But we have to be realistic, with how much bitcoin has dropped, the odds are that we are either at the price bottom, or very near it. In my opinion, this price drop feels much more bullish than what we experienced in 2018/19. During that time bitcoin had just finished going parabolic and there was a blow off the top price movement. This resulted in the price moving down steadily for nearly two years. There was nothing to be bullish about during that time, and there was real concern if bitcoin would ever be able to fully recover.
But today's situation is different. Bitcoin is dealing with some real macro events, that it may not been strong enough to survive in the past. Government regulations, Covid monetary tightening, the Ukraine/Russia war, countries like China banning bitcoin and mining, and the list goes on. And like I mentioned before, we just had the whole Luna/UST situation that resulted in the Terra Foundation needing to sell off nearly 90,000 bitcoin in an incredibly short time. Which resulted in the price of BTC dropping. If you look at the brief summary above of FUD that we have had to deal with, there are possibly 3 black swan events or more. Things that couldn't have been accounted for, or planned for. Things that would have sent any financial market plummeting downwards in price. But, the incredibly bullish thing is that bitcoin is still nearly $29k. Still far above where it was when the covid situation first began. If all of those black swan events can only send bitcoin down to around $28-29k, that should have you feeling incredibly bullish.
While the UST situation caused chaos in the market the last week, the thing that you need to consider is that the Terra Foundation holding nearly 90,000 BTC had quickly become one of the largest FUD arguments thrown at bitcoin. Obviously that situation did take place, and did send the price of bitcoin downwards. But, in my opinion bitcoin handled it quite well. We can now mark off one of the largest FUD points against bitcoin. The interested thing is that while bitcoin was dropping and had hit the $25k area. Extreme bidding began taking place, and it was clear that this was level where bitcoin was extremely high in demand. Whales, hedge funds, and retail buyers saw the incredible opportunity and wouldn't let bitcoin drop any further. This is why I'm confident that $25k is the new flow that bitcoin will not drop under, unless something unforeseen happens.
Now what will happen next? The UST/Luna situation has ended, and covid is seemingly being quickly forgotten. The Russia/Ukraine war is still taking place and could sway the market depending on if it escalates or deescalates. The last obstacle is the world financial situation and fighting against the recession that we have entered. The United States and other economies around the world are quickly falling apart, and inflation has become rampant. The USA has recently been very hawkish in trying to fight the inflation which is good long-term for the economy, but really hurts in the short-term. And it has been very painful, so much so that I believe that the US will become a little more dovish in fighting inflation in order to prevent this recession from turning into a Great Depression. When that happens, the green lights in the financial world will turn back on and everything will soar in value. Bitcoin will be amongst the biggest gainers.
One thing to keep in mind is that when bitcoin was created, it was created in hopes of being a tool to fight against inflation and protect your wealth. Many people have been worried that the price of bitcoin has been dropping during times of high inflation, and being extremely correlated to the stock market. That won't always be the case. It is likely that bitcoin will soon De-peg from traditional markets. It could be a month from now, a few months, next year, or sometime after. Bitcoin is a game of word-of-mouth. And that conversation is quickly spreading throughout financial markets. While bitcoin's weakness at times is that it is the most liquid asset out there, being able to trade 24/7/365. That is also its strength. People are waking up to the real financial situation that is taking place, and learning how their money is essentially being stolen from inflation. It may take time, but people are learning the real value of bitcoin. This knowledge of bitcoin is leaps and bounds ahead of where we were just 2 years ago.
With that said, bitcoin has had to deal with possibly the most FUD it has ever had to deal with up to this point in its life. But bitcoin is still at nearly $29k. Even that couldn't send bitcoin below the previous 2017 bull run high of $20k. Once things begin to recover, watch out. Things are about to get interesting. I just hope that everyone is taking advantage of these cheap prices to accumulate bitcoin. Just like during the March 2020 covid price crash, this could be one of the greatest chances to accumulate that you will see for a long time.
How about you? Are you feeling bullish or bearish? What do you think is the price bottom for bitcoin?
As always, thank you for reading!
