Is the Current Bullish Phase of Bitcoin Sustainable or Should Investors Prepare for Another Bust?

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Bitcoin has soared by over 43 percentage since the start of 2022, hitting a five-month loftier on Tuesday. However, equally the premier cryptocurrency continues its latest bullish run, investors remain on the sentinel for another bust.

Notably, major cryptocurrencies that are highly correlated with Bitcoin accept also gained this twelvemonth. As an analogy, Ethereum has more than doubled while Ripple'south XRP token is up over 75 per centum.

Bitcoin is currently marching towards the $11,000 level subsequently having dropped to $9,700 earlier this week. Bear in mind that the cryptocurrency does confront a medium-term resistance around the $10,500 cost level.

Bitcoin'southward 11-twelvemonth history is chockfull of extraordinary bouts of volatility. As an illustration, the digital token witnessed a one,900 percentage rally in 2022 whereby its cost touched an all-time loftier of $20,000. However, a spectacular bust followed before long after that resulted in a collapse in Bitcoin'due south price to just over $3,000 by December 2022. These elevated volatility levels are a major factor in hampering Bitcoin'south mainstream adoption.

Can Bitcoin's latest bullish run final?

Bitcoin bulls are eager to point to a confluence of factors that, in theory, are supportive of a major uptrend. These include, enhanced expectations for mainstream adoption and supportive macroeconomic trends. Withal, the bullish factor that is cited well-nigh oft is the upcoming 'halving' event in May 2022.

As a refresher, currently, miners are awarded 12.five Bitcoins for every block mined. These awards are cut in half every four years to keep a hat on the cryptocurrency's inflation with the mechanism existence baked into the token's underlying lawmaking. By May 2022, the reward volition be once again cut in half to 6.25 new Bitcoins for every cake mined.

For reference, previous halving events accept also been heralded by significant increases in the cryptocurrency's toll.

As depicted by the infographic to a higher place, each previous halving upshot of Bitcoin has been followed past a major bullish phase. In the year that followed the ii previous halving events – in November 2022 and July 2022 – Bitcoin rose by around 80 times and four times, respectively.

Moreover, Facebook's efforts to innovate its own cryptocurrency – Libra – and the concurrent efforts by some governments, currently led by China, to introduce a crypto version of their sovereign currencies take raised hopes for an imminent mainstream adoption. Many traders accept as well taken a positive view of the comments by the U.S. Federal Reserve Chairman Jerome Powell on Tuesday when he told lawmakers in the capitol that the Fed was "working hard" on the cryptocurrency result only that information technology was nonetheless undecided on the introduction of a digital dollar.

Nonetheless, this rally is not without its skeptics. Michel Rauchs, the writer of several Cambridge Academy studies on cryptocurrencies and blockchain tech, told Reuters that:

"The contempo rally has been driven by the usual hype cycle that nosotros accept very reliably seen every two to 3 years." He went on to say that, "We take these mini-bubbling, and the momentum that information technology creates - bitcoin start, then these other coins. It's a cocky-fulfilling prophecy."

Source: https://wccftech.com/is-the-current-bullish-phase-of-bitcoin-sustainable-or-should-investors-prepare-for-another-bust/

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