Is Bitcoin still undervalued? What will drive BTC’s growth to cross $100,000 levels

Undervaluation assisting BTC recovery

Bitcoin witnessed a steady downtrend since October 1, 2021, when it reached the $61,000 mark. A brief up trend between January and March 2022 saw it climb to the $45,000 level, but the subsequent downfall led it to the $16,528 level by December 1, 2022. However, it began showcasing a bullish trend thereafter, making higher highs and breaching the $31,000 mark which acted as a psychological resistance. A bearish trend ensued after that, but the currency soon adopted a bullish reversal, achieving a 200+ per cent recovery since then. As of June 7, BTC has registered a 68.43% increase YTD with a current valuation of $71,283 — just short of breaching the all-time high levels. This bullish momentum was driven by the retail and institutionalised investors with the belief that BTC remained undervalued ahead of the halving event of 2024, but the overall steam has been sustained post-halving, highlighting that investors still believe that Bitcoin remains underappreciated and can shoot well beyond the $100,000 mark.

Influence of the Halving Event

Bitcoin halving is a quadrennial event, which cuts rewards to miners by half. Historically, BTC halving events have ensued bullish trends for the price action, adding momentum and creating new all-time high records. Similar trends have been witnessed historically, following halving events in 2012, 2016, 2020 and most recently, in 2024. These events have presented long-term bullish trends in Bitcoin’s price action, which have happened this year as well. The whales have become hyperactive in the market, and data suggests that several large Whales have accumulated between 1000-10000 coins in their wallets which has become a contributing factor in the price appreciation and may shoot it past the previous all-time high levels.

Can BTC breach the $100,000 mark?

Bitcoin had a brief trend reversal from its bullish momentum in April but soon adopted an uptrend on May 31 when it reached the $69,024 mark. It has since given continuous highs in June over the first five days but indicated a bearish doji on the sixth day and an inverted hammer on the seventh day. Overall, it has sustained its bullish momentum in June as investors wait anxiously for a federal reserve rate reduction soon. Furthermore, the positivity brought by the Bitcoin ETFs has ensured significantly high inflows as the market waits for a regulatory framework for cryptocurrencies from the US authorities. All these aspects have led the market components to speculate over a positive indicator for BTC’s upward momentum in the months ahead, possibly breaching the all-time high levels. In favourable outcomes, Bitcoin’s momentum can assist the VDA to ease past the $100,000 mark by the end of this year or the beginning of 2025, but it will depend on several external factors.

The ensuing bullish momentum has also given rise to widespread discussions, but some of them remain unrealistic so far. Predictions for Bitcoin to reach the $1 million mark by 2025 have also been made but without a strong logic or backdrop. However, prominent financial institutions have indicated in their reports that Bitcoin prices can climb up to $120,000 by the end of 2024, whereas others believe that it also includes significant downside potential for short-term investors.

Keeping arguments from both sides into consideration, investors must also be reminded of the dynamics of Bitcoin’s price action history, particularly its volatility. It is understandable that BTC’s resistant nature, which has turned it back up after significant downward trends has infused reliability to the followers, it is also important for investors to undergo a deep analysis before investing in decentralised asset classes. For now, time is the biggest factor in Bitcoin’s price appreciation and awareness will be the key to success while venturing in this domain.

(The article is attributed to Roshan Aslam Co-founder and CEO of GoSats)

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)

Source: Forex-Markets-Economic Times