09.12.2021

Crypto analyst explains why Bitcoin may never fall below $ 39,000

The best entry point for accumulating Bitcoin is the level of 39 thousand dollars. According to cryptanalyst William Clemente, the main cryptocurrency is unlikely to ever dip below that line in the next bull run wave.

He points to the falling volumes of reserves of crypto exchanges and the general optimism in the market among the main triggers of the upcoming rise in the price of BTC. Let’s talk about the situation in more detail.

There are plenty of examples of the heightened attention of large companies to digital assets. The most recent of these was MicroStrategy, which acquired an additional 5,050 bitcoins for $ 242 million and announced this last week. At the same time, the average purchase price was 48 thousand dollars per BTC, which means that even this level remains attractive for a company with a worldwide reputation, which was in the niche earlier than most.

MicroStrategy now has 114,042 BTC, which is valued at $ 5.46 billion at today’s cost. At the same time, 3.16 billion were invested in them.

bitcoin cryptocurrency investors

Public companies with Bitcoin on the balance sheet

It is especially important to emphasize that the company collected more than half a percent of all bitcoins in circulation – an incredible result for one organization. Obviously, entire states can afford much larger investments, which creates conditions for competition among them, given the limited number of BTC on the network.

When to buy Bitcoin

The concept of the minimum price in this context speaks of a mark that will be attractive for buying Bitcoin for the vast majority of market players. That is, if the cryptocurrency still drops to 39 thousand dollars in the near future, the pressure from buyers will simply not let it fall below.

Under pressure from buyers, we mean the activity of holders of stablecoins – that is, cryptocurrencies pegged to the value of the US dollar – who will undertake to transfer them to BTC in the event of a possible drawdown of the asset rate. Yet now Bitcoin seems more attractive than ever. Cryptocurrency has already become a full-fledged means of payment in El Salvador, in addition, small companies like the American AMC cinema chain are also implementing its support.

That is, the coin has already gained worldwide popularity, the pace of which is unlikely to become lower. And given the limited maximum number of bitcoins, this makes cryptocurrency an attractive investment.

The chart below shows the BTC low price line drawn by Clemente based on the Stock-to-Flow price model previously developed by another cryptanalyst under the pseudonym PlanB. The graph speaks of an ever-growing demand for bitcoins as cryptocurrency exchange reserves shrink. And this already indicates the massive withdrawal of coins from trading floors for long-term storage in cold wallets.

Bitcoin cryptocurrency trading

The chart of changes in the minimum price for Bitcoin

In recent years, the growing demand for BTC can be compared in the ratio of prices for the cryptocurrency itself and the latest models of iPhone smartphones. Recall that on Tuesday, Apple held a presentation of its new technology, showing the iPhone 13, iPhone 13 mini, iPhone 13 Pro and iPhone 13 Pro Max. Compared to last year’s presentation, these smartphones have now become much “cheaper” for cryptocurrency holders.

The chart below from Cointelegraph shows a clear comparison between the prices of the latest iPhones and the price of Bitcoin. The first sharp gap in the ratio is observed in 2017 – just during the previous bullish cycle of the cryptocurrency. Then it already cost $ 3,630, while the iPhone 8 was selling for $ 699.

IPhone Bitcoin price

Comparison of prices of iPhones and Bitcoin in recent years

When the iPhone 12 was released last October, the gap was huge – at a price of $ 799 per device, Bitcoin was estimated at almost $ 13,000. That is, a smartphone could be purchased for about 0.06 BTC. Now the gap has increased several times: the cheapest iPhone 13 will be sold for $ 799, while Bitcoin at the time of Apple’s recent presentation has grown to almost $ 48,000. Accordingly, for the latest iPhone you need to pay “only” 0.016 BTC.

Bitcoin cryptocurrency trading

Dynamics of Bitcoin price changes over the last 90 days

Let’s hope that this amount in bitcoins will continue to fall over the years. This “iPhone index” shows how rapid the growth of the main cryptocurrency can be in just a couple of years. And this is even without taking into account some altcoins, which only in 2021 overtook BTC in profitability dozens of times over the same period.

We believe that Clemente’s forecast is not bound to come true, and Bitcoin may well fall below $ 39,000. At the same time, we agree with the logic of the analyst’s rationale. The first cryptocurrency has indeed significantly advanced in terms of global adoption over the past year, which creates conditions for its further growth. And this, in fact, insures BTC and the entire market at the same time against significant falls like the one that took place at the beginning of 2018. Although in the crypt niche, by tradition, one cannot be completely sure of something.

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