Analysts are predicting that Bitcoin (BTC) prices could steadily rise, with the coin having added 1%.
The signs of hope, come after a rocky start to the year for BTC, which dropped 12% in the first week of January.
As small as the rise has been, it is a rise nonetheless, and veterans say it’s a positive direction for the market.
However, it bears no comparison to the first week of 2021 where BTC gained 15%, trading above $50,000, hitting its all-time high in February of that year, reaching $58,332.36.
This year has been swings and roundabouts for BTC, its hashrate also dropped to 136.5 EH/s at the beginning of January, but it has now increased, and the future is looking positive.
Panxora CEO Gavin Smith said: “Prices are likely to rebound from the current level around $42,000 though will remain within the $40,000-$60,000 band.
“This would set Bitcoin up for a move to new highs later in the year. We predict the catalyst for this move to be stubbornly high inflation numbers coupled with a continuation of negative real interest rates.”
According to Oanda senior market analyst Craig Erlam, although BTC has recovered from dipping below $40,000, this rebound is nothing by the coin’s standards.
He said: “If Bitcoin can break $45,500, we could see another sharp move higher as belief starts to grow that the worst of the route is behind it.”
IntoTheBlock head of research Lucas Outumuro at commented on the drop, saying: “This is certainly good for risk assets and it has become more and more evident that BTC falls under that bucket, at least for now.”
Stack Funds head of research Lennard Neo added: “Bitcoin has been behaving more as a risk asset recently amidst market uncertainties.
“The markets are still split if BTC is an inflationary hedge or risk asset, and with the current macro climate, expect more volatility in the short term.”
Whether BTC is seen as a risk-on asset or as a clear inflation hedge is dependent on geography, according to Jason Deane, an analyst at Quantum Economics.