Analysts Give New $80,000 Price Target for Bitcoin. Is It a Buy?

The crypto winter may be thawing. Is it time to invest?

After talk of a crypto winter, people are wondering if we're entering a crypto spring. Just as flowers are tentatively blossoming outside, so are there signs of recovery in the crypto market. Bitcoin (BTC) broke $47,000 this week, and the total crypto market cap has stayed above $2 trillion for much of the week. But it's still early days.

Crypto has had a rough few months. After reaching new highs in November, Bitcoin's price halved in a matter of months, and even the slight price rallies since have faltered. However, some analysts are hopeful it might be different this time. Bitcoin's trended upward for several weeks, and has finally erased this year's losses. We're still a long way from the all-time high of almost $69,000, and Bitcoin has dropped slightly as I write this. But overall, it appears to be holding at prices we haven't seen since the start of January.

Why analysts are eyeing new highs

CoinTelegraph reports that well-known trader Crypto Ed is now "very bullish" on Bitcoin. He says we're moving to a stage when we're likely to see shallow corrections, though we can't quite expect a big upswing yet.

His technical analysis shows that a big drop is still possible, but the trader has "strong doubts" that this will happen. In fact, he says he now has a target of $80,000 for Bitcoin. However, he says there are several steps Bitcoin needs to take before it can push to what would be a new high.

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Other popular traders are bullish, too. Crypto commentator and trader Michaël van de Poppe told his YouTube viewers that Bitcoin needs to hold above $45,000 if it's to crack the $50,000 mark. For him, this is the next level of price resistance. De Poppe says the odds of going back to the recent lows of $33,000 or $35,000 are dwindling.

Is it a buy?

Bitcoin may eventually go to $80,000 or beyond in the long term. But the important thing to understand about the analysis above is that these are traders, not investors. The difference? Investors take a long-term approach with a view to building wealth over time. In contrast, traders tend to move in and out of investments to try to make short-term gains.

It isn't always easy to take a long-term approach, especially with an asset class as volatile as cryptocurrency. Here at The Ascent, we advocate a buy-and-hold approach over short-term trading. It isn't right for everybody, but a long-term perspective can reduce some of the risks of crypto investing. Timing the market is almost impossible, even for experienced traders. With buy-and-hold, you're also less likely, for example, to pile into a new meme coin that turns out to be a scam. Plus, it takes a lot of the emotions out of your decision-making, so it's easier to avoid panic-buying or -selling an asset. There are also tax benefits.

If you're considering investing in Bitcoin, here are three things to factor in:

• Your financial situation. If you're behind with other financial goals, such as paying down debt or building up an emergency fund, now's not the time to buy Bitcoin. Only invest money you can afford to lose, so that a market collapse doesn't devastate you financially.
• Your tolerance for risk and wider investment strategy. Think about how crypto fits with your other investments. Ideally, high-risk assets should only make up a small portion of your portfolio. And if you usually avoid risky investments, Bitcoin may not be for you.
• Your long-term view on Bitcoin. Before buying Bitcoin, take time to research cryptocurrency and blockchain technology. Some believe Bitcoin is a bubble that will burst and has no intrinsic value. Others see it as the future of money, with the potential to transform the whole financial system. If you fall into the former camp, Bitcoin will probably never be a good option for you.

Bottom line

The cryptocurrency industry is relatively new and unregulated, and it's often difficult to find solid ways to value individual assets. As a result, there are many price predictions for Bitcoin. Ark Invest's Cathie Wood believes it could exceed $1 million by 2030. Crypto skeptic Peter Schiff has said it could fall below $10,000.

In the short term, there are a lot of unknowns. These include increased regulatory scrutiny, the Russia-Ukraine conflict, and the Fed's economic tightening measures. All of these could push Bitcoin's price back down -- but it's almost impossible to predict exactly what impact they might have.

It's useful to pay attention to analysts' price predictions and what financial experts think about cryptocurrency in general. But it's also valuable to do your own research and make decisions based on your particular financial situation. Ultimately, it's easier to stomach the day-to-day volatility if you have a solid long-term investment plan and a clear idea about how Bitcoin fits into it.

Emma Newbery owns Bitcoin. The Motley Fool owns shares of and recommends Bitcoin.