We were so close to a crypto breakout, but this is now a ‘buy the dip’ moment, say Bitcoin analysts
The Omicron variant of Covid-19 may have spooked the markets, but financial experts are suggesting the current wobble in the value of cryptocurrencies could be an opportunity to ‘buy the dip’.
Bitcoin came within a whisker of creeping up and pouncing on $60,000 once more, with the possibility of a breakout to beat recent all-time highs, but alarming news of a worrying new Covid variant caused tremors throughout the world’s financial foundations.
Cryptocurrency had been leading the way last week as prices lifted from Wednesday’s doldrums that saw Bitcoin wallowing in a $55k mire, after enjoying values more than $10,000 that figure only a week before.
From what had seemed like a delicate position, prices across the board had begun to lift just as news was starting to break about a what is now known as the ‘Omicron variant’. Both fiat and crypto markets took the narrative hard as red candles drove the values of just about everything investors hold dearly in a steep southerly direction.
However, with one eye on some potential silver linings to the gathering shadows of these dark financial clouds, some experts have pointed to the possibility that this may be a very good opportunity for cryptocurrency investors.
Martha Reyes – head of research at digital asset prime brokerage and exchange BEQUANT, believes that any escalation of precautionary measures with the new variant, although unwelcome, could be viewed as helpful to the value of cryptocurrency.
“BTC and ETH were poised for a breakout as Americans were sitting down to their Thanksgiving meal,” she explained.
“However, the news of a new Covid variant coming out of South Africa led to a broad-based sell-off across asset classes. Low liquidity and $3bn in BTC options expirations with the maximum pain point at 58k added to volatility.
“$53k is an important support for BTC as that is where short term cost basis sits. It was only earlier this week that bond yields were rising as we priced in rate hikes on stronger growth and inflation. If lockdowns do ensue, which is not our base case scenario, that will lead to further helicopter money, which ultimately benefits digital assets.”
Her views were echoed by Ruud Feltkamp, CEO of cloud-based automated crypto trading bot Cryptohopper, who believes the current market situation is a ‘buy-in’ moment
“On the other hand, inflation is skyrocketing, and people are searching for more alternatives for their money on the bank – I don’t think it’ll take long until investors see this as a ‘cheap’ buying moment,” he said.
“We are still in the midst of the bull cycle, and I think rising inflation will lead to more money being allocated to stocks and crypto.”