The crypto market appears to have shrugged off weeks of lackluster performance as the price of Bitcoin (BTC) rose 14.5% over the past week to its current value of just over $43,000, according to CoinMarketCap.
Bitcoin slid by nearly 3% over the day after peaking above $45,500 on Thursday, but is now well above this year’s bottom of $33,500 seen on January 24.
This may still be not enough for some investors, though, with recent analysis by asset manager Blockforce Capital indicating that the average price investors bought Bitcoin at over the last five months is $47,000.
According to Blockforce Capital’s Brett Munster, this means that “on average, anyone who bought during that period has probably lost money and might not be inclined to buy more until they break even.”
Blockforce sees $47,000 as a “key threshold” for the price of Bitcoin, which, coincidentally, is also the 200-day moving average for the benchmark cryptocurrency—”a widely recognized indicator for determining which direction markets are trending in both the crypto and traditional markets.”
“This threshold could provide resistance as those recent buyers may look to recoup their investment and sell off,” wrote Munster. “However, should we break through and stay above this $47,000 threshold, it could provide those recent investors with the confidence to re-enter the market and start buying again.”
Currently, Bitcoin is down 37% from its November 2021 all-time high above $69,000, and while Blockforce reckons that “it’s still too early to declare with any certainty that $33k was the bottom,” the firm says there are reasons to believe that “there is now much more asymmetry to the upside than downside.”
“That doesn’t mean Bitcoin couldn’t fall back down again, but the data seems to suggest that the upside potential now outweighs the downside,” added Munster.
Meanwhile Ethereum (ETH), the second-largest cryptocurrency after Bitcoin in terms of market capitalization, is down nearly 5% over the day, currently trading hands at just under $3,100, per CoinMarketCap.
That said, the coin has gained over 9% in value over the past seven days.
Ethereum is facing increasing competition from the growing crop of proof-of-stake blockchains, including Cardano (ADA), Polkadot (DOT), and Avalanche (AVAX); however, some industry figures are quite bullish on the coin’s long-term future.
CEO of Canadian digital assets exchange NDAX Bilal Hammoud is one of them, predicting that the price of ETH will reach $10,000 by the end of 2022 as the coin’s value increases due to its scarcity and its imminent transition to proof-of-stake (PoS).
"Ethereum's latest upgrade turned into a deflationary asset. Proof-of-stake will further lock up ETH for staking rewards, which in theory should influence the price to go up as supply decreases, while demand increases," Hammoud said during a recent panel conducted by personal finance comparison site Finder.