Analysts predict a rollback of the bitcoin rate with a subsequent increase to $ 20 thousand by
According to leading experts, the current growth in the bitcoin rate is due to a number of stimulating factors, which in the near future will continue to have a positive impact on the cryptocurrency market. Therefore, most likely, by the end of the year, MTC will have time to update its historical maximum, but in the process it may face a wave of profit taking.
Current situation and growth factors
After last week the bitcoin quotation reached the resistance level of $ 18.4 thousand, there was a local correction to $ 17.3 thousand, followed by a quick return to $ 18.2 thousand and a breakdown of resistance. The growth of the cryptocurrency continued up to $ 18.8 thousand, after which a sideways movement began, which turned into another rollback to 18.1 thousand.Now the price of bitcoin is moving in the local corridor of $ 17.6-18.8 thousand.
According to Yuri Mazur, head of the data analysis department at CEX.IO Broker, interest from public companies and institutional investors is currently having a strong influence on the trading dynamics of BTC / USD. Bitcoin Treasuries data show that large players now own more than 842 thousand bitcoins, or about 4.5% of all issued coins..
The ongoing COVID-19 pandemic is also contributing to the growth of the cryptocurrency, putting pressure on the stock markets and economies of developed countries. In parallel, the demand for military-technical cooperation is stimulated by its revaluation as a new instrument for protecting capital from various kinds of risks..
EXANTE analyst Viktor Argonov also includes the recent actions of PayPal and Citigroup, which have taken steps that clearly contribute to the growth of the crypto market, to the list of significant influencing factors. The largest electronic payment system accepted 4 cryptocurrencies (BTC, ETH, LTC, BCH) into its account, while the international financial conglomerate said that the dollar in 2021 is threatened with devaluation by 20%, and bitcoin will rise in price above $ 318 thousand.
The PayPal innovation could add tens or even hundreds of millions of customers to the army of cryptocurrency holders, and Citigroup’s predictions have convinced many investors not to rush to sell BTC at current levels. All this is happening against the backdrop of Biden’s victory, from which investors expect a more liberal attitude towards cryptocurrencies and at the same time – more generous «printing dollars».
What to expect by the end of the year?
Speaking about the price prospects of bitcoin at the end of 2020, analysts expect a small rollback of the BTC, followed by an increase in the rate to new all-time highs..
Viktor Argonov believes that there is a share of investors with a loss of profits syndrome on the market who did not manage to consolidate their profits in 2017 and want to recoup this time by selling bitcoin at $ 19-20 thousand. However, today they are opposed by other FOMO investors driven by the opposite fear: selling assets too cheaply and «lag behind the train». Therefore, as you approach this price range, you can see a certain wave of profit taking and a slight correction.
The analyst doubts that sellers will be able to reverse the general trend. According to his forecasts, by the end of the year, the old record will probably not just be broken, since Bitcoin has every chance to jump strongly at its new highs..
«It is difficult to stop the current rally, and it is worth asking who is even capable of doing this before the end of the year. It is unlikely that this is due to a pandemic or Biden’s political mistakes.», – says Viktor Argonov.
Yuri Mazur identifies two main scenarios. The first includes a correction to the $ 16 thousand area with a further rebound and sideways movement, after which the rate will return to the $ 19 thousand level and by the end of the year will approach the $ 20 mark. If the rollback does not occur and the sideways trend continues, then upon exiting it by January, the price of bitcoin may well rise above $ 21 thousand..
«The corrective scenario seems more likely to me, since we are witnessing a very long and large upward wave in the price range. Such waves are always replaced by corrective movement, so in this situation it would be a very logical continuation of the uptrend» – says Yuri Mazur.
The risk of repeating the 2017 story
In 2017, BTC collapsed only after it had risen 20 times in price since January. Over the current year, bitcoin has grown 2.5 times, and there is no talk of any serious bubble. More powerful factors work in favor of raising its rate than in favor of a collapse or even a transition to flat.
During the period of the crypto boom, the MTC took only the first steps towards official mass adoption. The most rapid part of its rally was caused by euphoria over the imminent opening of settlement bitcoin futures, which, on the contrary, led to a deep drawdown. Most of the market participants were retail investors, often newbies with a poor understanding of the risks of emerging futures.
Today the crypto market is much more developed, and its participants are less naive. Now it contains not only settlement, but also deliverable futures, as well as options of both types. Large institutional investors, who are well aware of the consequences of certain political and economic events, actively participate in the auction. Many invested in cryptocurrency last winter or spring, and now they are interested in growth and use all kinds of leverage for this..
Prospects for the next year
Bitcoin, like other digital assets, may continue to grow in 2021. According to Ivan Kapustiansky, a leading analyst at Forex Optimum, this is due to the fact that the world economy will still recover, and central banks will continue to fill the markets with liquidity and support the economy through the emission of money. Part of the funds will go to high-risk, speculative instruments, so at the turn of the year, the upward dynamics may well continue.
«Given the current market trend and the technical picture, we should expect a renewal of the maximum and continued growth above the $ 20 level.–21 thousand. However, after that a correction is not excluded, since some speculators will probably prefer to fix profits», – thinks Ivan Kapustyansky.
text: Ivan Malichenko, photo: RTVI, Shutterstock, Telegraph