The weekend found traders glum, with the majority of digital currencies slithering in worth, but as always, all eyes were on Bitcoin. From August 11 to August 12, the price of Bitcoin fell by $3063. But at the same time, it has rallied by 78% in one day — a massive amount of trading volume, meaning that this dip is getting bought up hard and fast by the market.
In all the chaos, Bitcoin has been silenced by one of its biggest proponents, Michael Saylor, who is also executive chair at Microstrategy. – “Volatility is a sign of high energy, and Bitcoin is the solution to everyone’s problems.” in his interview with Fox Business.
Volatility is a sign of high energy, and #Bitcoin is the solution to everyone’s problems.pic.twitter.com/8YG1a5GaFl
— Michael Saylor⚡️ (@saylor) August 8, 2024
Bitcoin’s price howled success from 2009 priced at just $0.0009 to $58860.56. Further, in 2017, Bitcoin went up from below $1,000 to almost $20,000, only to fall back to about $3,000 in December 2018. This volatility has remained consistent.
So Is Bitcoin’s Volatility Really an Issue?
As Natalie Brunell, Host of Coin Stories Podcast, rightfully stated, Bitcoin was trading at $25k last August, and now it is valued at $58,652.89 (+134.61% over a year). What might look like a sharp drop and rise in prices, Bitcoin has had a relatively steady growth in the larger picture.
Bitcoin has generally been framed cynically by critics as a high-risk asset for speculators — one which they believe is destined to go low in the long term. While yearly growth in percentage is not the same every year, the average annual returns range from 200% — 300%.
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The price swings in Bitcoin spark the volatility debate. Critics argue that such instability in price hampers the reliability of Bitcoin as opposed to fiat currencies, which are less volatile. However, Bitcoin is not a competitor to fiat currencies but now, has transformed into ‘digital gold’ i.e hedge against inflation.
Volatility aside, this decentralizes and democratizes a financial system where worth is defined as the aggregate of individuals’ decisions rather than specific mandates from an elite few. Therefore, volatility is not a weakness but a feature of Bitcoin.
Michael Saylor stresses understanding the “power” of Bitcoin — over price, as you know that volatility will be part and parcel with asynchronous adoption by different countries. Much like stocks, market fluctuations are part and parcel of Bitcoin’s trajectory as a disruptive technology in the money market.
In this perspective, investors can see Bitcoin’s value as more than a high-powered stock-car designed to overcome any short-term price swings — but instead, focus on the lasting effect Bitcoin is imprinting on global finance.
A Bullish Breakout on the Horizon?
The current price of Bitcoin, $58,749, has set the stage for a potential bullish rally. Technical indicators show that the 200-day Simple Moving Average (SMA) will rise to around $65,573, and the 50-day SMA will reach about $69,540 by mid-September 2024.
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Moreover, the stable aggregate open interest signifies constant market engagement, thereby strengthening the possibility of considerable price gains. If these elements were taken into account, Bitcoin could easily be valued between $68,000 and $72,000 in September, provided there are no significant disruptions and favorable market situations remain. Therefore, with these figures, Bitcoin would be seen as an attractive short-term investment with solid long-term prospects.
