Bitcoin has every chance of hitting its all-time high of $ 20,000. However, one shouldn’t expect this to happen in early 2021, says a TradingView analyst.
The pseudonymous company, which operates under the pseudonym “XForceGlobal”, said the significant upward trend was “highly unrealistic” as public interest in Bitcoin is nowhere near the Google trend level of late 2017 / early 2018.
Also, the market lacks the hype that used to bring cryptocurrency to $ 20,000. This can be seen in the lack of fresh capital entering the Bitcoin space in 2020. Nonetheless, the bids are rising due to supporting fundamental and technical catalysts, mainly related to the depreciation of the US dollar.
“I believe more and more that the market extension cycle is at play here,” added the analyst. “And if your neighbors aren’t talking about buying Bitcoin, this market is currently playing with ‘recycled’ money.”
An analysis of the keyword “Bitcoin” shows a comparatively lower level of public interest than in 2017. Source: Google Trends
An analysis of the keyword 'Bitcoin' shows a comparatively lower public interest than in 2017. Source: Google Trends
Bitcoin rose more than 200 percent after falling to $ 3,858 in March 2020. The rally borrowed from the Federal Reserve’s decision to keep interest rates near zero and buy government and corporate debt “as long as necessary”. In addition, an injection of $ 2 trillion into the economy through the U.S. Congress’ coronavirus auxiliary bill further improved the cryptocurrency’s positive trend.
Mature fortune in manufacturing
XForceGlobal highlighted the negative correlation between Bitcoin and the US Dollar Index (DXY), a barometer used to measure the strength of the greenback against major foreign currencies, noting that the latter drives the “real price movement” of the former.
The analyst also discovered Bitcoin in what is known as a “growth cycle phase”, in which cryptocurrency investors have matured and got used to their trend style. There is no “stupid money” in the market that could rock the Bitcoin price from $ 13,000 to $ 20,000 in just one week, like the 2017 and 2019 bull runs did.
Comparing the last bull runs of Bitcoin. Source: BTCUSD on TradingView
Comparing Bitcoin's recent bull runs. Source: BTCUSD on TradingView
“Bitcoin’s 202 Bull Run creates a series of ‘HIGHER LOWS’ that are extremely healthy for the bigger picture,” he added. “It may well be to ‘buy the dips’.
Bitcoin cup and handle
The analyst then presented a super-bullish outlook for Bitcoin, which may also see a period of carnage in the market.
The technical pattern known as cup and handle comes to life after the price of an asset moves up sharply. After that, the market starts to sell, causing the price to drop slightly. This forms the “Cup” section of the pattern.
If the price continues to trade up, it will go back again – this time gradually as it forms the “Handle” section of the pattern. Eventually the price breaks out to the upside.
Bitcoin Cup & Handle Pattern as highlighted by XForceGlobal. Source: BTCUSD on TradingView.com
Bitcoin Cup & Handle pattern, as highlighted by XForceGlobal. Source: BTCUSD on TradingView.com
However, the analyst expected Bitcoin to fall to complete the Handle section. A breakout above the overall pattern would put the cryptocurrency on its way to $ 20,000 – slowly and steadily.