The rapid increase in the value of bitcoin seems to be holding traction and continuing to go higher. The currency has already crossed the $15k mark and is sitting at $15,800 at the time of writing this. However, according to analysts, this rapid increase in value may get a bit slow, giving the currency time to consolidate before it goes on to the $20K target in December. According to Swissquote Bank’s digital assets head Chris Thomas, “The cryptocurrency may consolidate for a short period before moving higher into Christmas.” This is quite true from a technical perspective as well since the rise in value for the cryptocurrency during the last two months is at the very least, stretched.
The value increased by 60%, from $9,800 to the current value and the relative strength indices for 14 days and 14 weeks both show a value of more than 70. Chris’s views were also shared by Patrick Heusser, one of the senior cryptocurrency traders with Crypto Broker AG, a Swiss crypto trading company. He said that the currency will keep hovering between $14k and $16k during the coming weeks. He said that this will allow other lagging cryptos to gain some momentum and increase in value. Bitcoin’s fast growth has put a noticeable dent in the growth of other cryptos due to its fast rise during the last two months.
Of course, there are those who are of the belief that instead of just staying in its place, it might even go down due to its sheer purchasing during this period. According to LMAX Digital’s Joel Kruger, “Bitcoin is overbought after surging through critical resistance at $14,000, which suggests we could see a period of correction and consolidation.’ In a tweet, he mentioned that bitcoin has had more than 9 pullbacks during the last bull market with a value of at least 30% each time. However, he still shared the optimism that the long-run direction for bitcoin is still upward. Kruger is a currency strategist with LMAX Digital.
Even though pullbacks have been a part of bitcoin’s rise previously, this time we could see a proper drawdown, considering the fact that investors are holding on to their bitcoin assets strongly and sell-side liquidity is almost nowhere to be found. Even with the short-term outlook for bitcoin showing a divide between observers, the long-term picture remains positive for most people with many expecting it to reach the previous record of $20,000 by year-end.
According to the co-founder of Kenetic Capital Jehan Chu, investor sentiment is sitting at its best point ever. He said, “We expect short-term volatility alongside even more powerful upward trends, flirting with $20,000 before year’s end and, if the stars align, $50,000 to $80,000 by the end of 2021.” In addition to that, Kruger also mentioned the weaker dollar providing further addition to the value of bitcoin. He said, “Look for the market to establish above $20,000 in 2021 before the next major upside extension into the $30,000-$40,000 range,” and that “any major setbacks should be well supported above $8,000.”
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