Bitcoin’s death cross descent may just be the beginning

By

January 17 2022
Share

Some bitcoin backers are jumping at the chance to gain from recent losses in the cryptocurrency market.

While recent upheavals are bad news for current bitcoin investors, they might open the door for the next generation.

Acknowledging recent losses, Dacxi chief executive Ian Lowe suggested that things might not be as bad as they sound.

“After a breakout 2021, 2022 has seen a sluggish start for multiple well-established cryptocurrencies,” he said.

“Speculation now falls as to whether BTC will hit the ‘death cross’ of the 50 day moving-average moving below the long-term 200 day moving average.”

While many crypto investors are dreading this possibility, Mr Lowe is hopeful about it for several reasons.

“First, there’s a lot of younger investors hoping this ‘black swan’ type event will give them a good buying point for the long term,” he explained.

Pointing to recent research conducted by YouGov, which suggested that as much as 56 per cent of Australian investors are putting money into crypto with long-term returns in mind, Mr Lowe said that the mood around bitcoin and other cryptocurrencies is shifting away from short-term gains.

“In addition, the future of crypto is no longer closely tied to institutional adoption of any particular coin, as the blockchain continues to prove its utility and the reality and possibilities of web3 become more obvious,” he added.

For Australians especially, Mr Lowe predicted that high house prices would continue to push younger investors towards alternative asset classes like cryptocurrencies.

“Eye-watering real-estate prices mean crypto’s slow start this year makes it the only game in town for Australian investors looking for assets with both a low barrier to entry and potential for growth,” he said.

That said, Mr Lowe reminded investors that volatility is part and parcel of cryptocurrency investing. He encouraged investors to expect some downside and to diversify their holdings across a number of different cryptocurrencies rather than going all-in on any single one.

“Finally, it’s worth remembering bitcoin is a bit like Lazarus,” Mr Lowe said.

He said that bitcoin has come back from a “death cross” before and has rallied significantly in the time since.

“Many will remember this and be willing to jump in and see if there’s another rally ahead this time too,” he predicted.

About the author

Fergus is a journalist for Momentum Media's nestegg and Smart Property Investment. He likes to write about money, markets, how innovation is changing the financial landscape and how younger consumers can achieve their goals in unpredictable times.

About the author

Fergus is a journalist for Momentum Media's nestegg and Smart Property Investment. He likes to write about money, markets, how innovation is changing the financial landscape and how younger consumers can achieve their goals in unpredictable times.

sections

most read

sections

most read

sections

most read

sections

most read

sections

most read

sections

most read

sections

most read

Most read

Age Pension increase prompts Australians to review their finances

Latest Podcast

Credit card use hits record high as Australians spend smarter

Resources

There is $17.5 billion in lost and unclaimed super across ...

Invest