Timing the market is near impossible, especially regarding the volatile crypto markets (particularly this year). However, a seasonal buying opportunity could allow prospective Bitcoin investors to get in on an area of value.
Technical indicators may give traders an inkling of what Bitcoin’s price might do, but nobody has a crystal ball. With Bitcoin’s price reaching an all-time high in late 2021, it’s difficult to predict that 2022’s market correction will cascade into a bear market as the leading cryptocurrency’s price struggles to stay above the $20,000 mark.
Bitcoin did stage a summer rally after falling during the first half of 2022. Now, a price consolidation could be underway as traders hang back and wait whether more pain from the first half of 2022 is ahead.
“It remains plausible that Bitcoin is in a bottom formation range and would be historically similar to all past bear markets,” said James Check, a lead analyst at Glassnode. “However, Bitcoin prices are just barely hanging on, and any uptick in the fundamentals would be a welcome change.”
Potential Upside Ahead
However, other analysts foresee potential upside ahead. The month of September could be a prime buying opportunity, particularly for those looking for an area of value or to dollar cost average further at lower prices.
“We might have a little more volatility to the downside in September, but I believe through October, November, December we’ll start to see some upside,” said R.A. Wilson, CTO of 1GCX.
As an alternative to placing bitcoin on a public exchange, investors can also opt for getting exposure to futures contracts in bitcoin via the ProShares Bitcoin ETF (BITO ). With cryptocurrency regulation still in its infancy, BITO will allow investors to get bitcoin exposure on a traditional market exchange, thereby reducing the risk of a public exchange going out of business.
Furthermore, BITO is actively managed, giving investors dynamic exposure to the bitcoin futures market. This puts portfolio management in the hands of market professionals who can increase or reduce exposure to contracts, given the current nature of the ever-changing, volatile crypto market.
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