© Reuters
Investing.com – Crypto enthusiasts who buy Bitcoin and hold it for the long term generally assume that fiat currencies are doomed. Considering the increase in the money supply and the increase in debt since the financial crisis, at least there is no denying that BTC has a great advantage. It is limited to a maximum number of 21 million units.
Jan3 CEO Samson Mow assumes that the devaluation of the euro, dollar & Co will accelerate further, as central banks around the world have to deal with double inflation rates figures. For bitcoin, this would mean that the BTC/USD price would reach the magic mark of one million dollars in the next five to ten years:
“It can happen quite quickly…almost overnight, if people are carrying their cash around in wheelbarrows.”
For fear of galloping inflation, investors have been using the possibility of diversifying their portfolio with precious metals such as . Because, as with bitcoin, the physical supply is limited.
If the case arises where weekend purchases have to be paid for with a whole wheelbarrow of cash, then it will be seen which is the better payment alternative – gold or BTC.
Goldman Sachs (NYSE:) is in any case of the opinion that gold is much more appropriate than bitcoin to diversify a portfolio. This is mainly because gold has no speculative applications.
In the current market environment, the price of gold has risen slightly over the past year, while bitcoin has lost 75 percent of its value. The reason is demand, as Goldman Sachs explains:
“The fall in liquidity represents a lesser burden on the price of gold. This is more influenced by real demand”.
The investment bank thus refers to central banks, but also to industry, which take advantage of the fall in prices to increase their stocks. On the other hand, the cryptocurrency market is regularly panicked, which sends prices plummeting.
Bitcoin technical analysis
Bitcoin is currently rising 1.39% with a price of $17,159, while the weekly gain is 0.92%.
The cryptocurrency broke through the 23.6% Fibo retracement support at $16,986 yesterday, while the daily low was formed at $16,878. The day’s closing price, however, was above the Fibo retracement, raising the possibility of a rally towards the 38.2 percent Fibo retracement of $17,841. This resistance is reinforced by the 55-day MA of $17,993 and the immediate proximity of the psychological threshold of $18,000.
Only if this zone is sustainably breached can we expect an extension of the upside move towards the 50 percent Fibo retracement of $18,533.
If, on the other hand, the daily close price were to break below the 23.6 percent Fibo retracement, then the focus would shift to the November 28 low, which sits at $16,013. Below that, expect a test of the cycle low of $15,504.
By Marco Oehrl