Bitcoin has been on a turbulent ride in recent years, with its price plummeting in 2022 due to the bankruptcy of several major firms. However, according to Vetle Lunde, a crypto markets analyst at K33 Research, the industry has been weeding out the “rotten fruits,” leading to a more stable market. He believes that Bitcoin price is on track to reach $45,000 in May.
Similar Bitcoin Price Pattern as in 2019
Lunde sees parallels between Bitcoin’s recent surge and its price pattern from 2018 into 2019. In an interview on CoinDesk TV’s “First Mover” program. The analyst observed that the drawdown and recovery stage being shown by the cryptocurrency lately is mirroring its behavior in 2019 both in duration and price trends.
K33 Research analyst predicted last week that Bitcoin could reach $45,000, based on his research note to clients. Despite the recent dip of 2% in Bitcoin’s value, it has increased by 80% in 2023. The market rebound followed a year of turmoil, which caused many major firms to declare bankruptcy, resulting in risk-averse investors leaving the cryptocurrency market.
Investor Caution and Short Squeezes
Lunde points out that negative to neutral sales of derivatives, despite recent price gains, are extra signs of investor caution. However, he notes that the dynamic of short squeezes can push Bitcoin higher, as investors who grew cautious are underexposed and shorting crypto.
Less Exposure and More Caution
The industry-wide crisis of 2022 has taught the industry a lesson, and according to the crypto analyst, it was instrumental in washing out the “rotten fruits” or bad actors in the market. He believes that the sector is now in a more robust stage, able to handle higher interest rates for longer. This is because firms have become less exposed and more cautious, leading to a safer environment for the market.
Future Risks and Market Sentiment
Lunde opines that the recent indications that the U.S. central bank could potentially reduce its hawkish monetary policy following encouraging inflation data might have a positive impact on market sentiment. Nevertheless, he cautions that comparable crises may occur again in the future. However, at present, those types of risks appear to have been removed from the market.
Final Thoughts
Bitcoin has been on a rollercoaster ride in the past years, with the bankruptcy of major firms causing much distress. However, according to K33 Research’s Lunde, the bad actors have already been weeded out, leading to a more stable market. Lunde predicts that Bitcoin’s price will surge to $45,000 in May, drawing parallels between its current surge and its 2018-2019 price pattern. Despite potential risks, he believes that the market is now more robust, and investor caution could transform into market sentiment.
Amid this very promising news, investors are always strongly advised to do their due diligence before betting their money on Bitcoin or any other cryptocurrency. The value of crypto is not always guaranteed to perform the same way as it did in the past. The increasing token supply is the primary factor that could prevent such a phenomenon from happening again.
As more tokens are added to the market, it tends to drive down their value due to oversupply. Ethereum is an example of this, where the introduction of Ethereum Classic in 2016 drastically increased the circulating supply of Ethereum and drove down its price.
Other factors that can further affect the performance of cryptocurrencies include the overall health of the market, technological advancements, and more competition.
Giancarlo is an economist by profession with a career spanning nearly two decades. His professional journey has seen him assume vital roles in various government and private organizations such as the Department of the Interior and Local Government (DILG), the National Economic and Development Authority (NEDA), Megaworld Corporation, and the China Banking Corporation in the Republic of the Philippines.
In addition to his civic and corporate pursuits, his forward-thinking approach has led him to manage several prominent websites in the banking and finance sector, notably the Australia-based RateChoice, where he immersed himself in the world of emerging financial technologies and where he found particular interest in Bitcoin all the way back to 2013.
Prior to his addition to Blockzeit’s dynamic team, he held an essential role as Project Manager for initiatives encompassing blockchain, stablecoin, mining, special economic zone development, and iGaming. This noteworthy chapter in his career unfolded under the auspices of InPlan Consultancy Services, Inc., the think-tank of IMPERO Consortium Management Corporation headquartered in Manila, Philippines, and Tokyo, Japan. InPlan, led by a distinguished retired Cabinet member of the Philippines, collaborates directly with IMPERO’s core management team, contributing to strategic planning and business development endeavors.
