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The bottom of the Bitcoin market – Have we reached it yet?

Analysts analyses the elements that are influencing the price of bitcoin.

Despite the fact that numerous indications are yelling “buy,” the price of bitcoin is starting to encounter “new” resistance at $20,000. The opinions of several analysts are presented regarding the potential development of the Bitcoin price.
When the price of Bitcoin was trading above $60,000, the most knowledgeable experts and people who are financially inclined informed investors that the price of Bitcoin would never go below its prior all-time high.

These same people also stated that $35,000 was a generational purchase chance, and that they believed that buying at $50,000 was an opportunity to “buy the dip.” Later on, they also predicted that the price of bitcoin will never drop below $20,000 again.

Of course, “now” is a perfect moment to buy the drop, and one might believe that purchasing Bitcoin for $10,000 or less would be the deal of a lifetime. However, this is not necessarily the case. However, at this point in time, all of the so-called “experts” have been silent and can no longer be located or heard anywhere.

Therefore, investors are left to their own devices and thoughts as they try to determine whether or not the market has already reached its bottom. Should one exercise patience and wait for the predicted “down to $10,000,” or is the moment right to purchase Bitcoin and alternative cryptocurrencies?

In most cases, trying to predict when prices will bottom out is a fruitless endeavor. The question of whether or not there are basic reasons for choosing to invest in Bitcoin is what you should be focusing on because it is incredibly crucial to pay attention to it.

There has been a significant shift in price, but has there been an improvement or a decline in the underlying foundations of the Bitcoin network, as well as the infrastructure that supports Bitcoin as an asset? It is essential to hone down on this data because, for investors, this is where one should be deriving their confidence and investing thesis. Therefore, it is important to zoom in on it.

This is precisely why Coin telegraph organized a Twitter Spaces event with industry analysts Joe Burnett of Blockware Solutions and Colin Harper of Luxor Mining. The following are some salient points from the discussion:

When the price of bitcoin may “go back up,” it will be determined by the equity markets.
Joe Burnett, an analyst at Blockware Solutions, claims that the monetary policies of the Federal Reserve and its effect on equity markets have a significant bearing on the price of bitcoin. Burnett said:

“The macroeconomic situation is certainly exerting a significant amount of downward pressure on the price of bitcoin. The Federal Reserve has been more active in monetary policy since November of 2021 in response to the high CPI inflation. A rise in interest rates will eventually result in a decline in the value of all assets. The interest rate is really a form of gravitational pull on financial assets, and discounted cash flow analysis is virtually all that it is. The Federal Reserve is attempting to reduce demand and inflation by raising interest rates, which is part of its strategy to combat inflation. Bitcoin, along with other risky assets, is undoubtedly feeling the effects of this pressure.
When asked about the Bitcoin hash ribbons on-chain indicator which suggested that BTC had bottomed and miners had capitulated confirming that the Bitcoin bottom was in, Burnett responded by saying, “I think with every sort of like on chain type metric, you definitely have to take it with a grain of salt.” [Citation needed] You can’t just look at it in isolation and conclude, “Yes, the bottom of the bitcoin market is in.”

Burnett said:

If US equities do drop to new lows, it is almost probable that Bitcoin will do the same. Having said that, I believe that minor capitulations do often represent the bottoms of the Bitcoin market when you look at the fundamentals of Bitcoin itself. And Charles Edwards’ hash-driven indication, which depicts, in essence, that there was a miner capitulation this summer, shows that there was, in fact, a miner capitulation.
The relationship between Big Energy and Bitcoin miners is beneficial all around for Bitcoin.
Throughout the year 2022, one of the most popular topics of conversation was the growing partnership between large energy providers, oil and gas companies, and industrial-size Bitcoin miners. When asked about the direct benefits that this relationship could have for Bitcoin itself, Colin Harper responded as follows:

My opinion is that mining Bitcoin has neither positive or negative effects on the cryptocurrency. I believe that it is beneficial for Bitcoin in the sense that, in the long term, it will actually increase network security, decentralise mining, and place it in like, virtually every part of the world if you have energy producers mining it. In other words, I think that it is good for Bitcoin. However, in terms of actually doing anything to the price, I believe that scenario only represents an instance of larger usage. And as to whether or not people will be using it on a day-to-day basis as a medium of trade, a store of value, and simply general investment.”
Harper provided additional context by saying, “If these firms actually start mining it, then it becomes more tolerable.” The social stigma associated with it decreases. It depends, I suppose, on the oil producer and the political leanings of that individual.”

When asked what the future of widespread adoption of Bitcoin may look like in connection to the expansion of the mining sector, Harper provided the following explanation in response:

When it comes to incorporating Bitcoin into their stacks, it’s only a matter of time before they do so. And I think that’s when things start to get interesting in terms of mining as an industry, because if 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 to eventually turn a profit because you’re going to see hash price, which already trades in backwardation. And I think that’s when things start to get interesting in terms of mining as an industry. Because if you have the producers of the energy and the people who own the Eventually, it is possible to foresee a world in which the only people who can truly make a profit from their bitcoin mining are energy producers and those who are invested with or embedded with energy producers.
The expansion of the Bitcoin Lightning Network will be driven by regulation and an increasing appetite for self-custody.
Both analysts were of the opinion that, despite the fact that it might take a few years, there is a significant growth potential for layer-2 Bitcoin. Burnett made the following prediction about the future of Bitcoin: “Over time, more and more people will learn to demand final settlement of their Bitcoin, which means that more people will have their own keys.”

The following is what Burnett claims:

“If Bitcoin adoption grows by 100x or 1000x, there will be a lot more competition for scarce block space, and on-chain fees will likely rise just because people will be demanding much more settlement, magnitudes more settlement on the base layer.” “If Bitcoin adoption grows by 100x or 1000x, there will be a lot more competition for scarce block space,” However, the amount of block space available to settle on the basal layer is static. Consequently, an increase in on-chain costs will, in my opinion, have the effect of potentially making lightning channel liquidity that is already open and accessible. It’ll make it more valuable.”
Harper agreed with this statement wholeheartedly and went on to say that, in his opinion, the Lightning Network “will be the thing that allows Bitcoin to be used as a worldwide medium of exchange, and also, like Jack Mallers has put it, It’s the thing that can kind of separate Bitcoin, the asset from Bitcoin, the payment network in a way that’s actually scalable.”