At the end of November 2020, Bitcoin approached the $20,000 mark – the absolute maximum recorded in December 2017, falling slightly short of it. Bitcoin exchange rate reached $19,400, after which it briefly rolled back to $17,000. Investors are debating whether this growth will continue or whether the crypto market is waiting for a correction. Let’s analyze the situation and consider several scenarios to understand what to do now: buy or sell Bitcoin.
Why Bitcoin exchange rate has increased
Before coming to any conclusions, you need to find out what caused the price of the main cryptocurrency to rise. Bitcoin growth was influenced by many factors that together formed the current picture.
First, this May, the halving took place, and as a result – the reward for an extracted block was cut in half – from 12.5 to 6.25 BTC. Why is this important? The fact is that after halving, the issue of new BTC coins slowed down by half. This counteracts the deflation of the cryptocurrency, that is, with continued demand, Bitcoin price will grow even faster. Mining of new coins will stop completely around 2140.
Second, institutional investors and large hedge funds have become interested in investing in Bitcoin. This year, the number of Bitcoin wallets with more than 1,000 BTC exceeded 2,200. There is also a steady increase in Bitcoin holders numbers, and this year it reached ATH, as evidenced by Glassnode data.
The growth of Bitcoin addresses tells us that investors are interested in long-term Bitcoin storage.
Third, in 2020, many companies and government organizations in some countries started to support Bitcoin transactions. One of the world’s largest payment systems – PayPal – has added support for buying and selling Bitcoin directly in the wallet. This news has become a strong driver for growth – now the purchase of cryptocurrency has become available to several hundred million PayPal users.
Finally, after the March crisis and the collapse of stock markets, investors’ appetite has increased significantly, and they are more willing to take risks, pushing aside protective assets such as gold and other precious metals. Bitcoin growth coincided with a rally in shares of major technology companies.
These are only some of the factors that caused the strongest Bitcoin growth since 2017. Of course, do not forget about the FOMO effect – watching the rapid Bitcoin growth, many users who shunned crypto investments decided to try their luck again and facilitated the growth.
At the end of November, after Bitcoin broke the $19,000 mark, a correction occurred: the exchange rate fell below $17,000, and then consolidated near this level. $20,000 is a significant psychological level for Bitcoin. Most likely, investors expected such market reaction, given its behavior in December 2017, when after reaching this mark, the price rolled back and a long correction began, which lasted until the spring of 2019.
But will this fall really be followed by a correction? Similar price behavior was observed before the previous rally in December 2017: before reaching new highs, the price suddenly rolled back. But then there was a powerful impulse, and the main cryptocurrency rate grew up to $20,000.
What will happen now? No one can say for sure – the market is unpredictable, and further movements largely depend on early and recent investors. There are two possible scenarios:
Scenario # 1
Early investors fix their profits between the $17,000 and $15,000 levels, and then a new, more powerful spurt will push the price up and overcome the previous ATH. Many analysts suggest this scenario, because the hype cycle has just begun, and new investors have started coming to the market.
This can be understood by observing the Google Trends indicators: when the price reached $15,000, the number of requests for “Bitcoin” continued to remain at a low level. Only in November, the GT indicator began to grow, which indicates a new surge of interest in Bitcoin from “cold” investors.
Scenario # 2
After a pullback, there may be a small jump, and then the price will continue to adjust, gradually returning to the previous key levels. Experts believe this scenario is less likely, but it should not be excluded – you should be prepared for anything. Early investors made a fair profit. In addition, new year’s holidays are coming, and traders can close their positions or hedge them.
What to do
Regardless of the events unfolding, most investors are convinced that in the future, Bitcoin will become one of the most valuable assets in the world. Our future is a digital world, with digital currencies such as Bitcoin at its core. It is likely that it will lead this movement.
Therefore, if you consider Bitcoin as one of your investments, it doesn’t really matter when to buy the cryptocurrency. Especially if you plan to hold cryptocurrency for more than a year. However, if you think that now is the right time to buy Bitcoin, then take care of insurance and some reserve funds so that you can buy more cryptocurrency in the event of a correction. Try to distribute your investments and invest small amounts periodically, for example, once a month or once a quarter.
All that remains is to decide how to buy Bitcoin. There are several ways to do this:
- Through the OTC market (large amounts are required);
- Via a crypto exchange;
- Via online exchangers;
- Directly from another individual.
The best option is to buy through exchangers – it’s fast and convenient. You just need to fill out an application on the site and transfer the currency using the bank details specified by the exchanger. After the operators process the request or it is confirmed automatically, the coins will be sent to your Bitcoin wallet. This usually takes no more than 15 minutes.
The rate will be slightly higher than the market rate and, as a rule, it already includes all the fees. Buying Bitcoin on an exchange does not give much advantage, despite the lower rate. You pay a fee twice: when depositing fiat and when withdrawing cryptocurrency, as well as a small fee for the trade itself. In addition, you will have to pass KYC, which will be a threat to your privacy.
A suitable exchanger can be found using special monitors, such as Changevisor. The service provides a large list of available exchangers that can be easily filtered by available exchange methods. First, choose a payment method, for example, buying Bitcoin for PayPal USD, and then find a suitable exchanger. All exchangers are sorted by the exchange rate, starting from the most profitable one.
Buy and exchange bitcoins fast using Changevisor, which provides a list of reliable and verified exchangers.
Bitcoin has grown more than 4 times since March, so it may seem that now is not the best time to invest in Bitcoin. But if you’re aiming for the long-term investment, it’s not that important. You only need to follow the basic rules of risk management to reduce possible losses.
And if you decide to buy Bitcoin, then the Changevisor service will help you choose the best exchanger. Right on the site, you can read user reviews to determine which exchanger is the best for you.