Three reasons why this might be a good time to buy Bitcoin
cryptomarket is amid a bear run with its market cap dipping to below $2 trillion on September 20.
- The world’s largest
cryptocurrency, Bitcoin, has lost nearly 10% of its value as of 6:00 pm Indian Standard Time (IST).
- It has plummeted to below $43,000 despite highs of $47,000 this weekend.
Analysis by CoinTelegraph expects the mood to remain “firmly in favor of upside” returning across the cryptocurrency markets in the last three months of the year — October, November and December.
According to PlanB, the ‘worst case scenario’ for Bitcoin coin is to close the month at $43,000, giving away to at least a high of $63,000 in October.
We just bought the dip.150 new coins!El Salvador now holds 700 coins.#Bitcoin— Nayib Bukele (@nayibbukele) 1632113624000
Why is the crypto market dipping in the first place?
Bitcoin's most recent dip comes on concerns over what is already happening in China and what could happen in the US. The US Federal Reserve meeting is set to meet this week, and the verdict could result in stablecoins being tagged as risk factors to the overall financial system.
China's Lehman moment. The money printing will be massive, I repeat MASSIVE! This is good for #bitcoin https://t.co/lAdSMhnk3L— PlanB (@100trillionUSD) 1631717376000
In the short run, the crisis in China could end up being a larger problem for global markets. However, whenever the fiat markets have been in crisis, it’s been a good day for Bitcoin. After all, the 2008 global meltdown that was kicked off by US investment bank Lehman Brothers, is what inspired the birth of Bitcoin.
September has never been a strong month for Bitcoin — and a ‘halving’ rally is overdue
For instance, in 2013 after the first halving in 2012, Bitcoin dipped by 1.37% in September to make a comeback from $1,00 to $1,100 in the following two months. A similar rally was seen after the dip in September 2017, a year after the 2016 halving event.
The third halving event occurred in May last year, which — if the pattern holds — means that there’s a likely rally coming in the next two months.
It’s not just Bitcoin taking a hit this month
The global financial environment has pressure pushing down on stocks and gold — the impact on Bitcoin is comparatively minimal.
The price of Gold is approaching the cheapest levels ever set in 2000 compared to the NASDAQ 100 Index$NDX $QQQ… https://t.co/5nldV1MksX— Peter Brandt (@PeterLBrandt) 1631980786000
It’s about to get even more difficult to mine for Bitcoin
The supply of Bitcoin is limited to 21 million and nearly 90% of that has already been mined. But that’s not the only factor that determines whether or not miners will get their hands on any coin — it’s also the hashrate, which is the amount of energy required to successfully mine for a block.
Digital mining involves solving complex mathematical problems, using computers, rather than digging through caverns. The more energy that is needed to solve a problem, or a ‘block’, the greater the ‘difficulty’ of mining for Bitcoin.
The hashrate is determined by the number of people trying to mine for the coin. The more miners there are, the more likely the difficulty will increase.
Most of China’s miners, who were displaced due to the crackdowns starting May, have started to come back online from other locations. And, the difficulty level is about to increase for a fifth time in a row, something that hasn’t happened since late 2019.
While #Bitcoin Massively Dumped the Hash Rate Actually Increased. This Shows a Relative Strength in Bullish Demand. https://t.co/Sjh0yR6aSz— Vince Prince (@Vince_Prince_) 1631534401000
These indicators combined form to make a similar step that has been seen ahead of other Bitcoin bull runs.
Bitcoin broke out of a bull flag last night, set a higher high, funding at 0.01%, and my feed is dead silent. Excellent.— Will Clemente (@WClementeIII) 1631979953000
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