Bitcoin bulls are firmly in control.
In two months, the Bitcoin price has crossed above two resistance level—the $13,800 of June 2019, and $20k of Dec 2017. These were psychological levels, resistance lines now support and could prove vital in price action going forward.
Capital is flowing to Bitcoin. The BTC price blew past $24k and reach $28.38k over the weekend. At this pace, analysts are now projecting further gains towards $100k in the next few months.
At the time of writing (Dec 28), the Bitcoin price is up double-digits in the last week, adding 13 percent.
The $28,387 new-high of Dec 27 is the new all-time high.
It also doubles as the resistance for Bitcoin bulls aiming at $31k.
Bitcoin (BTC) Price Overview
The path of least resistance is northwards.
In the daily chart, the $28,387 of Dec 28 is the resistance line for bulls. It is also the impediment that if broken can see the BTC/USD price rally to $31k.
On the downside, the $22.5k and $20k levels are immediate support levels. Notably, as evidence from the chart, price gains of the last few months have been near perpendicular and with increasing trading volumes.
Specifically, the break above $20k was critical as it opened up bulls aiming at $25.5k and $31k.
Notably, the $31k is the 161.8 percent Fibonacci extension level anchored on the 2017 trade range.
If this guides, it is clear that the BTC/USD price is trading within a bullish break out pattern with immediate support levels at $20k and $13.8k, respectively.
Bitcoin (BTC) Market Movers
Analysts say the current Bitcoin price spike is the work of institutions. Scrambling for a piece of the 21 million BTC to ever circulate, the resulting demand is squeezing BTC prices higher.
According to Dan Morehead, the CEO of Pantera Capital, in an interview, said Wall Street giants like PayPal are scooping up most of the new Bitcoin mined. Combined with Grayscale selling coins at a huge premium and generating cash flow. With this, they buy even more coins, propping buyers.
“We have a #Bitcoin shortage. Buyers like @PayPal are buying more than 100% of newly-issued bitcoin. When you have several big institutional investors each purchasing more than 100% of bitcoin the price is going to squeeze up.”@SquawkCNBC: https://t.co/l3bjH3XczK pic.twitter.com/8Pf5CzEhFd
— Dan Morehead (@dan_pantera) December 23, 2020
Dan said there is a Bitcoin shortage given the unprecedented demand from high net-worth investors and institutions.
For this, they project Bitcoin price—at spot rates, is nine weeks behind schedule. In their prediction, the digital gold can rise to six digital above $110k.
Meanwhile, the expansion of BTC/USD prices has seen the coin’s market cap rally to $505 billion.
On Dec 27, when prices broke past $27k, Bitcoin—in hours, gained the total market cap of Ethereum ($73 billion), pointing to the strong level of demand, pushing its dominance even higher.
Bitcoin Price Prediction
The Bitcoin price is trading within a bullish breakout pattern as aforementioned.
After closing above $13.8k and $20k, bulls have been buying the dips and aiming for new highs.
From the weekly chart, the underlying momentum is strong. For this, bars are banding along the upper BB. At this pace, every low is technically a buying opportunity for bulls.
Based on the 2017 trade range, the first target will be $31k. It is the 161.8 percent Fibonacci extension level. If buyers close above this, the BTC/USD price could rise to $49k, the 2.168 extension level based on the same range.
A correction on the other hand could see BTC prices shrink back to $20k in a retest before the resumption of the trend.
Chart Courtesy of Trading View
Disclaimer: Opinions are those of the author, and are not financial advice. Do your research.
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