Should You Buy Bitcoin While It's Less Than $100,000?

Unless you've been living under a rock, you've likely seen Bitcoin (CRYPTO: BTC) skyrocket over the past few weeks. Starting November at $72,000, the cryptocurrency surged to an all-time high of just over $99,000 before running into significant resistance at the much-anticipated $100,000 mark.

Is Bitcoin's inability to breach $100,000 a red flag, or is this a golden opportunity to buy? Let's explore why Bitcoin stumbled at this milestone, what lies ahead, and whether it's still worth adding to your portfolio.

Image source: Getty Images.

The roadblock at $100,000

Bitcoin came extremely close to breaking the $100,000 barrier, missing the mark by just $200 before retracing to its current price of $93,000. The primary reason? A massive sell wall formed by investors shorting Bitcoin at or near the six-figure level. This concentrated selling pressure created resistance, preventing Bitcoin from crossing the psychological threshold.

However, this is likely a temporary setback. Bitcoin's struggle at $100,000 bears striking similarities to its attempt to break through $20,000 back in November 2020. At the time, Bitcoin hit resistance, retraced slightly, and traded within a tight range of around $19,000 for about two weeks. Eventually, the momentum picked back up, and Bitcoin soared past $20,000, embarking on a rally that culminated in a then-record high of $64,000 by April 2021.

The parallels are hard to ignore. Both instances occurred during Bitcoin halving years, both faced psychological price barriers, and both saw long-term holders selling while short-term buyers absorbed the selling pressure. If history is any guide, surpassing $100,000 isn't a question of "if" but "when."

Is Bitcoin worth buying today?

To decide whether Bitcoin is a buy today, consider one other key question: What's your investment timeline?

For short-term investors, the potential gains remain somewhat enticing. If Bitcoin mirrors its 2020 rally after breaking $20,000, it could climb to $300,000 or beyond. However, past performance is no guarantee of future success, and as Bitcoin's price increases, so does the starting capital required to realize substantial returns.

Simply put, buying at $93,000 involves more risk than entering at $20,000 in 2022 or $50,000 earlier this year. While Bitcoin may still have upside in the near term, its historical four-year cycle suggests the current bull market is likely closer to its peak than its beginning.

Short-term investors must also be prepared for increased volatility and smaller profit margins, compared to those who invested earlier in the cycle. If you're hoping to get rich quick at these prices, you'll need significant capital at your disposal or a willingness to embrace the elevated risks of buying at this stage.

For long-term investors, the story is much different. Bitcoin has consistently rewarded those who are patient.

If your investment horizon extends into 2028 (when the next halving will occur) or beyond, you're positioning yourself to capitalize on the compounding of another reduction in Bitcoin's inflation rate, greater institutional adoption, and Bitcoin's ongoing evolution as a premier store of value. While short-term gains can be alluring, adopting a long-term mindset will help you ride out market fluctuations and unlock Bitcoin's full potential.

What buying Bitcoin means today

I wouldn't hesitate to buy Bitcoin at its current levels because I have a long-term perspective and am confident that a dollar invested in Bitcoin today is going to be worth more in the future. While short-term gains are possible, they pale compared to the potential upside over the next decade. Bitcoin is a unique asset, practically designed to appreciate in value over time.

If you're seeking a place to store your wealth in an asset with proven resilience, unmatched security, and increasing adoption, Bitcoin remains a top choice. With a broader time horizon, today's price levels could look like a bargain in hindsight -- just as sub-$10,000 prices almost seem unimaginable now.

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RJ Fulton has positions in Bitcoin. The Motley Fool has positions in and recommends Bitcoin. The Motley Fool has a disclosure policy.