The bears and bulls are fighting a big battle in the cryptomarket. BTC has been trying to reach and surpass $10,000, but nothing has succeeded. The price of Bitcoin today is USD 9,160. If you’re interested in knowing if this is a good time to buy, check out this post.
Is it worth investing in Bitcoin at the current price?
In spite of the current difficult situation, with the likelihood of a sudden drop increasing, technical analysis indicates that in the medium and long term, the bulls continue to be in control. A trend that is undoubtedly caused by the important fundamentals behind Bitcoin.
For quite some time now, many analysts have been announcing that 2020 will be a great year for the crypto market. A sentiment mainly driven by Bitcoin’s already celebrated Halving, which reinforces its deflationary nature, confronting it with a system where injecting liquidity through fiat printing becomes a habit.
The entry of the big ones into the crypto ecosystem is increasingly noticeable, as they at least invest in cryptographic assets to cover themselves against the possible devaluation of the main fiduciary currencies.
While interest in BTC continues to rise, supply continues to decline. Holders hold their positions with a view to the long term, and the same code drastically decreases the supply, making the current scenario perfect for a bullish explosion.
Grayscale, the largest cryptographic asset manager, has bought almost 3 times the issue of new Bitcoin in the last week, and almost twice the issue since the Halving.
Bitcoin’s realized capitalization indicates a possible fall in its price
Stock to flow
With a predetermined emission, there is a widely recognized metric for predicting the price of Bitcoin in the crypto ecosystem.
The Stock-to-Flow model attempts to compare Bitcoin Rush to products such as gold or silver, which are characterized as valuable reserves due to their scarcity.
Like precious metals, the largest of the crypt coins is also scarce, in fact it is the first digital asset that achieved this quality.
The quantity of coins is limited, and a lot of electricity and computer power is needed to extract the remaining 3 million units, so its rate of issue is very low.
Stock to flow evaluates the available quantity of the product, against the new production for a specific period of time. A high ratio indicates that the commodity is scarce and therefore more valuable.
The price of Bitcoin today is in a moment of high tension, entering a stage where according to this metric, a great revaluation is most likely to happen, as a result of the recent drastic decrease in supply with the Halving event.
Knowing exactly when it will rise is extremely difficult, however, we can follow the price through technical analysis, and average entry and exit zones by analyzing the historical behavior of market participants, this we will see below.