Bitcoin’s recent dip below $60,000 has some people worried, but many analysts still believe it will bounce back. One of them is Ki Young, CEO of CryptoQuant, who thinks Bitcoin could even reach a new all-time high, but only if it stays above a crucial level.
Holding the Line at $45,000
Ki Young says Bitcoin is still looking bullish, but it needs to hold the $45,000 level. Why? Because that’s where miners start to lose money.
Miners are the people who use powerful computers to solve complex math problems and add new transactions to the Bitcoin blockchain. They get paid in Bitcoin for their work. Right now, it costs about $43,000 to mine one Bitcoin, including all the costs like electricity and equipment.
If Bitcoin drops below $45,000, miners will start to lose money. This could lead to them selling their Bitcoin, which would push the price down even further. If the price falls below $43,000, it could become unprofitable for miners to operate, which could lead to a decrease in the number of miners and a drop in the “hash rate” (the amount of computing power used to secure the Bitcoin network).
A Two-Week Test
Ki Young believes that if Bitcoin can hold the $45,000 level for the next two weeks, it could be a sign that a rebound is coming. He thinks Bitcoin could reach a new all-time high before the end of 2024.
A Bearish Warning
However, not everyone is so optimistic. Julio Moreno, head of research at CryptoQuant, has identified a bearish signal that hasn’t been seen in over a year. This signal, called the Bull-Bear Market Cycle Indicator, has historically been a sign of a bear market.
Moreno points to the 2020 COVID sell-off as an example of when this indicator turned bearish. If history repeats itself, the crypto market could be headed for another long bear market, which would mean the recent dip is just the beginning of a much bigger decline.
