Bitcoin Price Forecast: BTC Seen as Risk-On Asset, Not Just Store of Value

• Bitfinex Analysts see Bitcoin as more than a store of value; it is a unique, risky asset.
• Bitcoin almost reclaimed the $100,000 amid a sharp spike but has since reversed its gains.

The price of Bitcoin (BTC) shows signs of recovery after days of experiencing downtrends. In its latest report, Bitfinex highlighted several trends that depicted Bitcoin as more of a risk-on asset and less as a store of value.

Why Bitcoin is Tilting Towards a Risk-On Asset

According to the Bitfinex report, Bitcoin’s correlation with the S&P 500 remains strong. On the other hand, the coin’s relationship with Gold has weakened. Bitfinex explained that Gold is up 9% this year, while Bitcoin has gained only 3.5%.

Gold recently hit a new all-time high of $2,880 per ounce. Following this rally, its market cap spiked by $1.5 trillion this year, outpacing Bitcoin’s $66.5 billion. The report pointed out institutional and sovereign wealth fund purchases drive the divergence between Bitcoin and Gold. These entities have largely bypassed Bitcoin due to volatility and regulatory concerns.

However, the report noted that the current situation will likely shift soon. This sentiment is based on institutional investors’ rising adoption of Bitcoin. Notably, over $196 billion worth of Bitcoin is now held by ETFs, public and private companies, and country states. 

Additionally, Bitcoinʼs fixed-supply narrative is becoming increasingly attractive with central banks expanding money supply and fiat devaluation risks rising. Bitfinex is anticipating that Bitcoin’s range-bound behavior will continue soon, with potential negative pressure if macroeconomic conditions worsen.

However, they believe the long-term store-of-value narrative for Bitcoin will continue, even as Gold rises and institutional sentiment around BTC shifts. 

Expert Take on Bitcoin Movement, Technical Analysis, and Projections

Bitfinex analysts commented in a recent interview that Bitcoin has traded within a broad sideways channel, between approximately $91,000 and $107,000 since November. They claim Bitcoin is currently positioned near the middle of this range and would continue if no major factor pushes it out of this channel.

Surprisingly, according to technical analysis, Bitcoin has formed a pattern known as a bull flag, which usually indicates a potential breakout signal. If this pattern holds, it could continue Bitcoin’s long-term bullish trend. It would mean that Bitcoin’s recent bounce is more than just a reaction to market sentiment.

Bitcoin increased by 0.11% at press time, trading at $97,848. Earlier in the day, the price of the flagship coin rose as high as $98,492.9 before dropping to current levels. 

There are rising speculations that the Federal Reserve (Fed) will hold interest rates steady due to a resilient US labor market and inflation concerns. This would boost the US dollar and may cause risky assets like Bitcoin to fall. As we discussed earlier, another event that could sway Bitcoin’s price includes the upcoming speeches of key Federal Reserve officials.

Despite this gloomy outlook, Coinbase CEO Brian Armstrong said Bitcoin will have billions of users by 2030. As featured in our recent coverage, Armstrong noted that this prediction is based on Bitcoin maintaining the same adoption curve.