Thomas Fitzpatrick is leading the CitiFX Technicals market for Citibank and he has said that the cryptocurrency could be seeing major growth in value in the coming year. In a report which he wrote purely for the institutional clients of Citibank, he said that the price swings leading to bitcoin’s survival and growth are “exactly the kind of thing that sustains a long-term trend.” The technical analysis was leaked on Twitter by a user called ‘classic macro’ who also called Thomas Fitzpatrick “a big fan of moon targets.”
By using a weekly chart for Bitcoin showing its highs and lows, Fitzpatrick, using technical analysis (TA), was able to derive a value of $318,000 for Bitcoin which it would reach by December 2021. The tweet, on the other hand, commented on his analysis by saying that “This kind of technical analysis is of little value,” and that “There is no edge in guessing targets so far in time with TA. All we know is that price is likely to continue going up.”
The primary source of extrapolation for the analysis that Fitzpatrick used is the “exponential move” that bitcoin saw in 2010-2011. He said that this movement was very much like the increase that occurred in the gold market during the ‘70s. For about half a century, the value of gold was limited to a mere $20–$35, a situation that changed promptly once the Nixon administration announced its new fiscal policy.
According to Fitzpatrick, the value of Bitcoin was to go up due to several reasons. The main three reasons that he highlighted include the coronavirus pandemic, the liberation of gold from its ties with fiat currencies, and due to small banks opting for quantitative easing policies unlike anything ever before. All these factors when combined would lead to the value of Bitcoin rising exponentially.
However, the critique from classic macro continued who said, “What matters here is Citi’s clients being exposed to the bitcoin moon.” The user also believes that this is a selling pitch that the bank may be using to entice people into the bank’s ecosystem. What the real purpose is behind this report is certainly unknown. However, it would be worthwhile to see the degree to which Fitzpatrick’s analysis holds true.
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