Bitcoin ends a 9-week low. Is it worth buying?

Bitcoin ends a 9-week low. Is it worth buying? - Best performing stocksBitcoin (quotation BTC) has been breaking records lately, but not in the way many investors were hoping for. Gone are the days of new all-time highs and extraordinary trading volumes. Conversely, Bitcoin just posted a nine-week streak of losses. This is the longest sequence ever where the leading cryptocurrency closed each week at a lower price than the previous week.

Bitcoin held above $ 31.000 today and was trading around 5% higher than the previous day. However, it is still down 56% from its November highs. Furthermore, according to CoinGecko, Bitcoin lost more than 15% in May alone. Against this backdrop, ending more than two months of weekly price falls is a relatively small victory.

Has Bitcoin hit rock bottom?

Cryptocurrency investors who have seen the value of their portfolios drop significantly this year are eager to see the end of this depressed price period. However, it is almost impossible to define the bottom of the market. Keep in mind that analysts have been talking optimistically about price bottom for months, and it hasn't happened yet.

The challenge is that the current economic climate is very different from last year. There is much less money out there and people are much less willing to take risks. It is also difficult to use Bitcoin's price history as an indicator of what could happen in the future. The major cryptocurrency only started trading in 2010, so we have a rather limited amount of data to use to track trends.

Today's gains and the end of Bitcoin's losing streak could mark a tipping point. But it's just a day of good news in a sea of ​​economic uncertainty. It is very likely that the cryptocurrency market has yet to go down. Indeed, some analysts predict that Bitcoin could drop to $ 22.000 or less given high inflation and the possibility of a recession. We also don't know what the impact of more cryptocurrency regulation will be.

Is it worth buying?

The decision to buy a cryptocurrency depends on a combination of confidence in its long-term potential and your personal financial situation. Even if you think Bitcoin may perform well over the next five, ten or twenty years, you still need to be prepared for the worst. Manage your risks so that if Bitcoin fails completely, your finances don't get derailed.

Regarding your financial situation, the key question is: Are the other financial bases covered? This means having an emergency fund that can cover three to six months of living expenses, being up to date with your retirement contributions, and having some cash to spare that you can afford to lose. Cryptocurrencies are high-risk investments, so many financial experts recommend placing them in only a small portion of your portfolio.

The long-term potential

As for Bitcoin's long-term potential, there are no guarantees. Some believe Bitcoin may be the internet's future currency. Others think it may represent a form of digital gold. Cathie Wood's Ark Invest predicts it could be worth $ 1 million by 2030. The investment firm cites its potential to gain market share in several sectors, such as global remittances and emerging market currency role. Cryptocurrency skeptics think cryptocurrency prices will eventually collapse completely.

The important thing is that you do your research and don't be blinded by the risks that the stories of huge potential gains run. Almost half of the people who bought cryptocurrencies last year regretted their decision. You can avoid being part of next year's stats. Don't rush to buy cryptocurrencies today just because the prices are up slightly. Instead, take your time and make sure your cryptocurrency purchases are part of a larger investment plan.