A few days ago, Fed Chairman Jerome Powell said that they would do everything they could to fight inflation. Against this backdrop, experts have begun forecasting a 0.75 per cent increase in the US benchmark lending rate in September, the same record 75 basis points the market faced in June and July. The rate hike and quantitative tightening are designed to reduce consumer demand, which in turn will lead to a fall in the cost of goods and services. However, there is also the opposite effect – a fall in the stock market and crypto, which is still heavily dependent on stock price movements.

So in terms of short-term profits, coin enthusiasts seem to have no reason to expect growth in the coin industry. But what if we take a longer-term investment horizon? Experts at the Cointelegraph news portal the day before identified the main reasons why buying BTC now might be worthwhile.

What’s the upside of investing in Bitcoin

Today, Bitcoin’s price is 67 percent below its all-time high of $69,000. During previous bearish trends, the value of BTC experienced a 71 per cent drop between March 2020 and another 84 per cent correction by December 2018. That is, the current market collapse is well within the average Bitcoin correction globally, analysts said.

Weekly chart of Bitcoin price

The cryptocurrency’s overall trend is clearly shown by the channel of the 2-year moving average and its multiplier.

The channel of the 2-year moving average line on the Bitcoin chart

As you can see, the lows of previous bearish cycles coincided with a relatively short-term collapse below the lower line. The situation in the market now is similar – Bitcoin’s price has fallen to lows that are close to the most severe corrections in the past. For now, there is no point in saying that this trend could somehow change. Accordingly, for experienced investors there is reason to be positive.

Another unusual indicator, which indicates that Bitcoin is undervalued, is the so-called Golden Ratio multiplier. The principle behind the indicator was explained by LookIntoBitcoin founder Philip Swift.

The graph displays Bitcoin’s acceptance curve and market cycles, which give an indication of how the price can behave over medium and long term time frames. The indicator uses multiples of the 350-day moving average of the Bitcoin price to determine areas of potential resistance to chart movement.

In other words, it is one of the possible models for the further behaviour of crypto-assets in the future. It is important to understand that no existing tool can always work perfectly, because the cryptocurrency market is full of investors, who in addition do not often act rationally. Therefore, logical predictions can easily fail.

The gold section indicator on the Bitcoin chart

At the moment, Bitcoin’s price is noticeably below all multiples of the indicator. These lines could serve as clear resistance levels for the cryptocurrency’s rise in the next bull run. They also indicate that BTC is severely undervalued right now and periodically hoarding it could be a profitable strategy for investors. As a reminder, other profitable strategies for the crypto-zima period are described in our other piece.

Finally, the last indicator pointing to the benefits of buying Bitcoin is MVRV. It recently reached its lowest value since 2015. MVRV is the ratio between Bitcoin’s market capitalisation and realised capitalisation, i.e. the product of the coins’ exchange rates when they were last moved. The lower MVRV falls, the more crypto investors are now holding their BTC at a loss.

Historically, a major drop in MVRV and the formation of a bottom indicator has resulted in a global low for the entire crypto market. This situation is shown more clearly in the chart above. Notice how the MVRV and Bitcoin price lows coincided at critical moments of market decline in 2019, 2020 and 2021.

Historical trends of MVRV indicator


As practice shows, it is sometimes impossible to guess the reversal period of the coin market even with the most thorough technical chart analysis. But in this case investors should consider that Bitcoin and other popular coins are lagging behind their highs by 70% or more. And that is quite a good reason to at least think about linking to digital assets. Especially if investors expect to interact with coins over the long term.


Are you ready to buy Bitcoin right now? Share your prediction for the future of the market in our Millionaire Crypto Chat. We will discuss other market scenarios there as well.