These are some challenging times for the world’s largest cryptocurrency, Bitcoin. After the huge dip in the 2nd half of February, Bitcoin has been struggling to stay above $50,000. But at the same time, it has been stabilizing under that price point. After Goldman Sachs announced that they are soon resuming their cryptocurreny trading desk, the price of Bitcoin went straight past $52,000. But after the strong resistance that it experienced there, bears pulled down its price below $50k again. And even though Bitcoin has somewhat found solace between the $47k-$50k price, it could see high volatility in March, suggests analysis.
Stability or volatility! What’s ahead?
In the last few weeks, we have seen how volatile Bitcoin can get. And so it is important to ask the question, what to expect ahead if you plan to invest now. Well, to have a better understanding of the same, let’s take a look at both sides of the coin. Talking about the good part, Citibank says that as more institutional investors join in, we can expect a certain level of stability to form in the market. And the continuous acceptance of the cryptocurreny from the banks is also another factor in its favour. Citibank even said that Bitcoin could very soon become “the currency of choice for international trade”. And the fact that it is available in most countries makes this point valid.
But if there are so many good things, then why could Bitcoin see one of the most volatile times in March? Let’s see. March has financially been always the toughest time for Bitcoin. This is the time for tax payments and hence may force miners and investors to liquidate their assets. At the same time, the fact that $47,000 and $45,000 are acting as strong supports for the cryptocurreny, the $52,000 price is still tough to pass through. There has to be some real development in the world of cryptocurrency for this to happen. There is also a big liquidity factor. The number of Bitcoins in circulation is going down. As holders are not giving up their coins even after huge swings and whales are constantly accumulating coins. And as liquidity decreases, small transactions could cause huge price fluctuations. And hence the volatility.
Is March the right time to invest?
Well, I think that if you are already holding, it is a good idea to not sell. But if you haven’t bought it yet, then maybe March is the time when you can get an attractive price due to huge swings. And so can expect to make anywhere around 10-20% gains in just a few days and then hold long. But do note this is not financial advice, and you should do your own research before making a decision.
Do you think that Bitcoin could see high volatility in March? or as more investors dive into the markets, will it get stable? Let us know in the comments below. Also, if you found our content informative, do like it and share it with your friends.