The last two days after exponential growth Bitcoin seems to have hit a new barrier around $40k. I have seen people ask in different chats if that is a bad thing or a sign of a pullback. One person even stated that this was the end of the line for Bitcoin and it was going to fall back into the teens. Now I am not one to offer professional advice instead I am saying let's use some common sense.
This bull run has been completely different than prior ones. Who really would have expected massive companies like Paypal and MicroStrategy to invest in Bitcoin. While it was cutting edge and something companies like these could have done if you were to tell me in 2020 that they would do that I would have told you you had lost your mind. I was wrong though and now we are seeing increased institutional investing. Institutional investors are not fools and are not going to risk all of the client's money. With them moving into Bitcoin this is a huge sign that Bitcoin not only has staying power but it is expected to be a play for the near future.
Thinking about this then we must come to understand that with this new staying power comes the guarantee that Bitcoin will not fall below X value. While that value I have no idea what it is there is one. At this point, these investors with massive sums of money will be able to pour more money in supporting the asset which in this case is Bitcoin.
Imagine that Bitcoin fell down to 20k for instance. Imagine the absolute turmoil these companies would have to deal with from their investors. That is just further proof it will not dramatically fall. What is much more likely is for Bitcoin to find a new range to trade within for a second as it cools off and takes a breath. Even falling to $30,000 would not raise alarms for the publically traded companies leaving us with a bottom of $30,000 and an unlimited upside.
Bitcoin though like every other asset cannot go up forever. It will have days, weeks, even months that it will struggle and it might go up or down a little during this time. That is normal though and it is something that comes with adaptation. As more people join into crypto it will by default stabilize more and more. That is just something that happens as the user base grows and this, in turn, will drive the price up.
We should not fear a little breather for Bitcoin it has done it the previous months before exploding upwards and that is healthy and much much more sustainable than it doing it all at once. Nothing, not even Bitcoin, is free from going up forever and that is okay! It makes the asset healthier! It makes the asset something that has more value!
I hope everyone continues to be safe and staying healthy!
