Market watchers are asking if now is the right time to jump in. According to a recent report by 10x Research, when Bitcoin falls to the low $40,000s, it could be considered the best entry point for its next bull market.
This strategic observation is designed to help traders make knowledgeable choices within the highly volatile cryptocurrency space.
Why is it Referred to as the ‘Magic Number’ at $40K
Historical Trends and Analyst Insights
Markus Thielen, head of research at 10x Research, has pointed out that waiting for Bitcoin to reach around $42k-$43k may provide an opportunity for substantial profits. In February, Bitcoin traded at $42,577; those price levels may serve as good indications for investment before another major rally starts.
Support from Other Analysts
Thielen’s forecasts are not unique among industry experts who believe that we might see Bitcoin testing even lower support like $40,000 during the coming months. Timothy Peterson from Cane Island Alternative Advisors said: “If this support breaks – then $40k next.” These common predictions show how profitable entering at such levels can be.
Current Market Dynamics
Short-Term Volatility
Bitcoin recently fell below the key level of $60,000, which has caused concerns among investors. However, cautioning against this strategy during current conditions, Markus advises against buy-and-hold and suggests setting stop-loss orders at $54,000 per coin, thus minimizing risk exposure.
ETF Influence
- Despite $17 billion flowing into spot Bitcoin ETFs since their launch, prices have still been dropping.
- Retail investors may hesitate to engage in large buy-the-dip flows due to ongoing downtrends observed while analyzing charts or watching news media related to Bitcoin’s price action.
- Thielen notes that retail investors might be reluctant to enter into massive buy-the-dip flows given such downtrends.
Conclusion: Timing Your Entry
In conclusion, waiting for Bitcoin to drop below $40,000 may become the best entry point for its next bull run. This strategy is supported by various analysts and aims to help traders enhance their profits while dealing with the risks associated with investing in cryptocurrencies.
As always, please do your own due diligence and consider your risk tolerance before making any investment decisions. Happy trading!