The price has made a significant correction over the past few months. Does it look attractive at the current levels?


Bitcoin is the world’s leading cryptocurrency that was invented back in 2008 by a person or a group of people called Satoshi Nakamoto. The currency started operating officially in 2009.
Bitcoin is a decentralized cryptocurrency that doesn’t operate through a bank or another intermediary and it can be sent from one user to another through the peer-to-peer Bitcoin network. In fact, transactions are being verified through cryptography and are being recorded in a public distributed ledger.

Overall, Bitcoin’s success since its foundation has been a huge success. Especially in the past 4 years since 2017 more investors and traders have been attracted by Bitcoin’s features and great expectations for the future. We have seen some very large bullish movements as well as huge corrections especially since 2017. For example, after a massive rally from $2500 in the 2nd part of 2017 towards the $19,000 highs in early January 2018, the crypto market crashed significantly and Bitcoin dropped towards the $3,000 mark again in 2019.


However, it is important to say that the market is different now compared to the 2017-2018. The reason for that is because many institutional investors started appreciating the applications and the value behind the leading cryptocurrencies out there and the blockchain technology as a whole and even investors that had been widely criticizing BTC and the whole crypto market as a whole have started talking positively about it, appreciating its great expectations for the future. That in turn has been having a massive bullish effect on the price and is among the main reasons why BTC had gone up over 1500% in the past year until April 2021. Yet, since then we have seen a massive correction from the $65,000 highs to the current $33,000 lows. In other words, BTC is down 50% in only 3 months.

One of the main reasons for that has been China’s recent decision to ban cryptocurrency mining and has also forbidden the different banking operations and business with crypto companies. In fact, that was major news and a big issue for Bitcoin as about 65% of the world’s Bitcoin mining takes place in China. Once Chinese miners started shutting down their machines, the BTC value plummeted immediately.

Overall, Bitcoin is quite a volatile instrument and thus the risk of trading with it is quite high. In fact, over the past 10 years Bitcoin has suffered 4 separate losses of at least 50%, which is something that other sectors in the investment world could hardly experience.
Yet, all those corrections that take place could also be seen as amazing buying opportunities that could boost an investor’s profitability to the upside in the short, middle and longer run.


Chart: BTC/USD

The daily chart of the BTC shows the massive correction that has taken place in the past few months. Yet, the price has been struggling to go below the $30,000 mark and has found a massive support at that level, motivating investors and traders to buy BTC at that point and benefit from the correction of over 50% in a short period of time. We take into account the negativity coming from China and the fact that it is still having a huge pressure on the price. Yet, most of that movement has already been priced in and now the million dollar question is when BTC would bottom out – that’s truly the hardest thing to evaluate on the market, especially when it comes to cryptocurrencies and their huge volatility, mostly based on pure speculation.


Conclusion

Overall, we have been huge supporters of Bitcoin and the blockchain technology in general and believe in its great applications in the future. We have actually been investing in BTC for quite some time now and believe all those little profit-taking corrections are giving us great entry levels for our buy positions and a chance for us to buy at a strong support level and make high profits to the upside.

We are certainly interested in buying some BTC at around the first key support at $30,000. However, we wouldn’t be rushing into buying too much then. We would rather prefer to add some BTC to our portfolio at that first key support and should the price drop further in the short-term, we would then be interested in buying more at the next key support at $20,000. Sounds a bit crazy, right? Well, for a cryptocurrency to drop another 30% is not anything widely unexpected or impossible at all, actually.

In other words, by buying again at the next key support at $20,000 we would be able to get a better average price at around $25,000 and further boost our profitability to the upside.

Our initial profit-taking target is set at $42,000-$45,000, followed by the next target at $55,000-$60,000 where we would be fully cashing in our profits.




Sincerely,

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