Has Bitcoin hit bottom?

After a sharp drop a week ago (February 3), the price of Bitcoin has been fluctuating around $97,000. Everyone is wondering whether the price of Bitcoin has bottomed out?

The most optimistic is Grayscale, which says Bitcoin prices will hit new highs in the near future.

Zach Pandl, head of research at Grayscale, believes that although the just-released January U.S. job growth was lower than expected, the outlook for Bitcoin remains positive. This is because the market has already priced in the pressure of interest rate hikes, and policy changes in the coming months may have a positive impact on Bitcoin. In particular, legislative progress related to stablecoins may provide strong support for the further growth of Bitcoin and digital assets.

Pandl predicts that as long as the stock market remains stable, Bitcoin has the potential to hit new highs in the first quarter of 2025.

Please note that Pandl said that the first quarter's record high is premised on the stock market remaining stable. Therefore, if it fails to reach a new high in the end, you can't blame Pandl, because it is very likely that "the stock market did not remain stable."

Felix Hartmann, founder of venture capital firm Hartmann Capital, is more conservative. He said: "It may be a little early, but I feel that the market is close to the bottom."

The reason is that long periods of negative funding rates and widespread pessimism are signals of a market turn. Negative funding rates mean that there are more sellers than buyers, which usually reflects pessimism in the market and suggests that prices may be about to rebound. If you don’t know what funding rates are, you need to catch up quickly. This is a special term in perpetual contracts. This is a zero-based tutorial I wrote about perpetual contracts. I hope it can help you understand it right away.

In addition to the funding rate, Felix Hartmann also based his argument on the fact that many high-quality altcoins (such as Ethereum, Solana, etc.) have already pulled back to their long-term trend lines, almost "wiping out" all the gains in the fourth quarter of 2024. For example, Ethereum once broke through $4,000 in December 2024, but the current price has fallen back to around $2,600. Ethereum's problem is quite special. Everyone is very dissatisfied with the fact that Ethereum's price cannot beat Solana. I will talk about whether it is still possible for Ethereum to be "great again" another day.

My thoughts on Bitcoin price prediction are:

Guessing the short-term direction of prices is essentially no different than flipping a coin.

No matter what, there is a 50% chance of being right, so many people want to give it a try. If they succeed, they will have something to brag about. I never predict prices, and I will not tell you today whether the bottom has been reached. Of course, I have to do something for you, which is to provide a safer operation suggestion. So that you will not be scratched by the falling ice skates, and you will not miss the opportunity to buy at the bottom. That is:

Never trade on the left side, always trade on the right side.

I want to emphasize the importance of "market psychology" and "risk control" in trading. Left-side trading usually refers to predicting that the price has bottomed out and trying to grab a rebound during a market decline, while right-side trading is waiting for the market to confirm a turnaround before entering the market. The advantage of this strategy is that it reduces the risk of blindly predicting the market bottom, especially in a volatile market like cryptocurrency, where wrong predictions can lead to large losses.

I don’t recommend that newcomers adopt the above suggestions. Not only are newcomers psychologically challenged, but they also rarely know the left and right sides. On February 3, the day when Bitcoin plummeted, I wrote “Bitcoin falls below 92,000, is it the end of the bull market, or a short trap?” The article introduced the operation method of DCA, which is very suitable for newcomers, and there is also an ARP2 project for airdrop reference, which allows you to enjoy the ultimate rebalancing service.

Since it is difficult to predict the short-term trend of Bitcoin, I will not waste your time. Let me talk about the recent hot issue of Hong Kong immigration through investment in cryptocurrencies such as Bitcoin and Ethereum. I find it strange that this issue has become so popular.

Because cryptocurrency is just a proof of assets, nothing more. It is not that you can easily get a visa by telling the Hong Kong authorities "I have Bitcoin". You also need to use these cryptocurrencies to make designated investments in order to finally obtain an immigration visa. The investment targets can be stocks, bonds, and of course you can start your own company. Anyway, your money has to come out and leave your blockchain wallet. There are also requirements for the investment amount, which must be maintained at more than 30 million Hong Kong dollars.

Knowing this, you will understand why I feel surprised that this news became popular.

Finally, let me tell you something that can give you confidence - another American university has begun investing in Bitcoin.

The University of Austin has announced the launch of a $5 million Bitcoin investment fund as part of the school’s $200 million endowment, with plans to adopt a minimum five-year holding strategy.

Chun Lai, chief investment officer of the Austin University Foundation, said the school does not want to be left behind when the potential of digital currencies explodes. The first university to take the plunge was Emory University, which announced a $15 million investment in Grayscale's Bitcoin ETF three months ago.

There is no doubt that American universities and other institutions are becoming more accepting of crypto assets such as Bitcoin. The long-term holding strategy is seen as a relatively stable investment method.

Yes, if the price of Bitcoin can really reach 42.3 million US dollars per coin in the future, do you still need to care whether it is the bottom now?