Bitcoin may have performed extremely well over the past two months, rallying over 100% from the March lows, but technicals show and analysts argue that the rally is far from over.
Rally From $3,700 to $10,000 Just the Start of a Bigger Trend
According to Alex Fiskum, an associate at boutique investment fund Alice Capital, Bitcoin’s market sentiment and positioning of traders is “showing this was a hated rally.”
That’s to say, most investors were seemingly sidelined throughout this move, not getting overleveraged on the side of bulls or bears.
Chart from Alex Fiskum, a cryptocurrency trader at Alice Capital based in Hong Kong.
Kelvin “SpartanBlack” Koh — partner at The Spartan Group, a crypto fund, a former Goldman Sachs partner — echoed this sentiment.
He wrote in a tweet citing Fiskum’s analysis that he thinks Bitcoin investors are “still somewhat risk off,” with the options market, the relative strength index, and the “fear and greed” index all at points indicating most market participants are still sidelined.
These factors indicate that Bitcoin’s bull trend is far from exhausted, giving the cryptocurrency lots of room to the upside to rally sustainably should buyers step in over the coming weeks.
Where Will the Bitcoin Bull Trend Top?
That raises a pressing question: where exactly will Bitcoin go next? Will it rally to $15,000? $17,000?
The answers to this question are all over the map, but prominent investors believe that Bitcoin breaching $20,000 by the end of the year is entirely possible, citing a confluence of fundamental and technical factors.
Speaking to CNN on May 12th, Galaxy Digital chief executive Mike Novogratz suggested BTC would hit $20,000 in the coming seven months.
Backing his prediction, he cited three things:
The vast amounts of fiscal and monetary stimulus by the world’s governments and central banks
Bitcoin’s halving making the cryptocurrency more scarce than fiat currencies and gold
And Paul Tudor Jones, a legendary macro investor, entering the market.
Reducing “look stupid” risk & a global “fiscal orgy” could see $BTC hit $20K by year-end! Colorful as ever conversation with @novogratz from Galaxy Digital. pic.twitter.com/sqdFZxKiNK
— Julia Chatterley (@jchatterleyCNN) May 12, 2020
He elaborated to CNN:
“We have quantitive easing over quantitative easing all over the world, not just in the U.S. […] On the flip side, Bitcoin’s halving is basically ‘quantitative tightening’. So you have this exclamation point on the story of a scarce asset.”
In terms of technicals, one popular crypto trader this week shared the chart below, indicating that Bitcoin’s weekly price action looks much like it did at the start of 2019’s bull rally.
Bitcoin printed seven weeks of consecutive gains and then a “Doji” candle, the analyst noted. What followed the last occurrence of this trend was a 160% increase within the span of three or so months.
This means that should history repeat itself, the cryptocurrency could hit $20,000 as 2020 comes to a close.
Related Reading: Reddit Just Rolled Out an Ethereum-Based Crypto to Over 20 Million Users
Photo by Joe Cook on Unsplash