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Bitcoin at $25K: Discount or disaster?

Bitcoin at $25K: Discount or disaster?

In the latest episode of The Market Report, Cointelegraph analyst Marcel Pechman discusses Bitcoin’s (BTC) recent bounce at $25,000, which some analysts and influencers believe presents a short-term buying opportunity. Pechman highlights that Bitcoin’s correlation with the U.S. Dollar Index has only been consistent for 40% of the previous 20 months, suggesting it may not be an accurate predictor of price movements.

The show then focuses on a recent Glassnode report revealing that the amount of BTC being traded is at its lowest level since October 2020, attributing this to investor apathy and exhaustion. Pechman suggests that the actions taken by the United States Securities and Exchange Commission against Coinbase and Binance have caused fatigue among bulls. Overall, Pechman disagrees that Bitcoin reaching $25,000 is a buying opportunity, as the short-term risk-reward ratio at this price level is approximately 50:50.

In the next segment, Pechman analyzes Bitcoin miner Canaan’s vice president Davis Hui’s prediction that BTC will reach $100,000 by 2024, based on the halving and the approval of a spot exchange-traded fund (ETF). Pechman explains that BlackRock’s $10 trillion in assets is primarily invested in fixed-income investments and other ETFs, making it less likely for a significant portion to flow into Bitcoin. Additionally, Pechman highlights the risk of current holders selling their positions if the price of Bitcoin surges, making the supply unpredictable regardless of miners’ incentives. Lastly, Pechman argues that a spot Bitcoin ETF has been a long-desired dream that has not yet been realized, and the SEC’s reasons for dismissal, such as stablecoin trading volumes and unregulated offshore exchanges, have not changed.

Don’t forget to watch the latest episode of The Market Report, available exclusively on the Cointelegraph Markets & Research YouTube channel.

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This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.