In July, an alarmist thesis ran among cryptocurrency experts: after an overheating in the first quarter and a bump in the following months, the bitcoin would be about to meet a lower price level.
This drop was called by foreign analysts, as Mati Greenspan of Quantum Economics, in “capitulation”, from the military term for the surrender of an army; the market would be surrendering to the idea of an overestimated price expectation for the most relevant among cryptocurrencies.
But since then, a series of positive news has turned that scenario upside down. Some were not even confirmed, such as a speculated acceptance of crypto by Amazon, and others were unrelated to bitcoin, such as a network update Ethereum.
Added to the announcement of contributions by large funds in Germany and the migration of miners expelled from China, the news made bitcoin rise 37.13% and reach US$ 44,300 (R$ 232,000) after three weeks, on Thursday (12), exchanging the negative outlook for renewed optimism among specialists.
Until the last week of July, cryptocurrency had been flirting for weeks with prices below $30,000, far short of the record $65,000 (R$ 339 thousand) registered at the beginning of the year. Data suggested that the price would fall further, to close to US$ 20,000 (R$ 104,000), the historic resistance that bitcoin only overcome at the end of last year.
“The price was ‘lateralized’ for a long time, without breaking the US$ 40 thousand. With the risk aversion caused by the uncertainty about the global economic recovery, the buyer flow fell”, explained to me a few weeks ago. Director of Products and Partnerships at Transfero Swiss, Safiri Felix.
The “capitulation” thesis made sense, and this perspective was not necessarily negative; a stabilized bitcoin at a lower price, analysts said, would strengthen long-term investment in the ecosystem.
“Many counterparties have emerged, the largest banks and funds have strategies for the segment, and the crypto-backed lending sector has $55 billion in coffers. I like bitcoin at US$ 30,000 more now than I did in January”, he commented at the time Raymond Nasser, cryptoactive specialist at Inversa.
“It’s a good time to acquire cryptos and prepare for the next climb. By the end of the year, I believe bitcoin will position itself again at US$ 40 thousand”, predicted, also in July, Mariana Palau, responsible for customer service at BitPreço exchange.
They were dissonant readings of the bad climate that was taking hold. In early July, an indicator used to estimate asset price trends, called Bollinger, indicated that bitcoin would be close to an inflection point.
“The bitcoin graphics are ugly right now,” Greenspan wrote in a July 16 newsletter. “The downward slope that materialized gives the impression that forces are demanding a new $20,000 test”.
It would be a kind of adjustment of the previous “turning point”, that of the shot from $10,000 in October 2020 to $65,000 in April this year, in the wake of the adhesion of large global companies, such as Tesla, PayPal and Mercado Livre, and that slipped into Brazilian companies, such as empiricus and the investment seeker Yubb.
But along the way there was Elon Musk, the billionaire president of Tesla. He has been notable for stimulating crypto ups and downs with opinions posted on Twitter.
In February, its momentum was up, when Tesla announced that it had invested $1.5 billion (R$7.8 billion) in bitcoins in 2020 and that it would accept crypto in payments for the cars.
Then, in May, the momentum went down, when Musk backtracked on that decision because, he said, crypto spent too much energy recording transactions, mining, responsible for issuing new bitcoins.
Coupled with renewed threats from regulators in the United States against the bitcoin ecosystem and China’s ban on mining companies in June, Tesla’s retreat rocked a sharp drop.
Back to Brigadier Heaven?
But recent news has changed the prognoses and seem to anticipate a new bullish cycle – or at least one lowest floor in the short term, between US$38,000 and US$40,000, in case the winds change again.
For Marcos Jarne, country manager of the Mexican exchange in Brazil Bitso, one of the largest in Latin America, “Bitcoin fundamentals have been gaining traction, and the quote is in line with the global price rebalancing. Cryptocurrency traders need to look at the big picture; bitcoin will continue to be volatile, like any asset that evolves from a store of value to a medium of exchange”.
Thales Inada, cryptoactive specialist at Spiti, emphasizes the long-term recommendation in investing in crypto. “My focus is not on the short or medium term; on that horizon, anything can happen. But I remain confident in the resumption of high this year.”, he explains.
A month ago, he already credited the bad moment in prices the ban on miners in China: “By 2021, almost 50% of the computers that mined bitcoins were there. We had a drop in the computing power of the network, which devalues it and reflects on the price”.
Now, his reading is that the market has gotten ahead of the fact that “Soon, the miners [recentemente banidos da China] must reactivate their machines in new locations”.
Nasser of Inversa says, “The money was in the background getting ready to come in again. The ‘upgrade’ of Ethereum, which greatly improved the protocol, and the entry of German institutional funds contributed”.
Not even the recent bipartisan plan in the US to increase scrutiny on cryptocurrencies, he said, should shake the moment: “The plan is a mess, it’s a problem when lawmakers want to pass laws on what they don’t even come close to understanding. The US has a lot to lose by declaring war on crypto”.
Nasser takes a very optimistic view: “My long-term perspective has never changed since 2016: $500k per bitcoin is my price. In the short term, I think we can surpass the US$ 70 thousand before the end of the year”.
Bitcoin price — Photo: Getty Images