Today, the price of bitcoin continued to move higher and eventually broke its prior top. The new all-time high was set at $40,180, according to CoinGecko.
Additionally, BTC/USD is up almost 35% since 2021 began. We couldn’t have hoped for a better start.
At the time of this writing, bitcoin is trading around $38,544. Since yesterday, daily trading volume has increased by around 20%, from $60 billion to $79 billion.
As we predicted yesterday, the price of bitcoin moved above $40,000 and should soon surpass the $45,000 range. Interestingly, there was a minor wick that almost touched this new price range.
Today’s price appreciation could be related to a recent J.P. Morgan report where strategists from the financial services giant stated that bitcoin could reach $146,000 if investors flock to it as a safe-haven asset.
As long as these bullish types of news continue to be released by traditional media, it will attract more buyers that hope to catch the train that will take bitcoin above $100,000.
To conclude our introduction, we think the recent price move towards $40,000 attracted new sellers, meaning that we might see a minor consolidation taking place for a day or so.
However, soon after, we expect new buyers to keep entering the bitcoin market, meaning we think the price of bitcoin will continue its uptrend towards $45,000 and perhaps above.
For now, we think BTC/USD might suffer a 10% or 20% decline if more sellers keep arriving.
As a reminder, we are confident BTC/USD will continue to move upward if:
- BTC/USD remains above its 20-day EMA (red), 50-day EMA (green) and 200-day EMA
(blue) - BTC/USD doesn’t drop below $35,000.
- BTC/USD daily volume goes back above its 21-day Moving Average.
What Do Traders Think?
The first tweet we would like to share comes from Mati Greenspan, founder of the cryptocurrency research firm Quantum Economics, as well as a trader, investor, and licensed portfolio manager.
Greenspan shares the one-month chart of BTC/USD since 2012, writing how the current rally will obliterate the previous 2017 high. In other words, the $20,000 mark from 2017 will look like the $1,000 mark from 2013.
As Greenspan wrote, the 2017 gains will look like a blip in the chart.
Of course, for that to happen, the price of bitcoin would have to make substantial gains and move considerably above $200,000.
We think this is precisely what will happen, and that there is a good chance the current cycle top is above the $200,000 mark. Let’s see what other traders think.
The second tweet comes from NebraskanGooner, whose Twitter profile describes him as the founder at LVL and co-owner of Elevate Trading.
The trader shares his analysis of the long-term price of BTC/USD. He thinks there is a chance that the price of bitcoin could rise close to $400,000 per coin. How? His logic is quite straightforward.
NebraskanGooner states that once bitcoin breaks its prior price record, it usually “tends to run over 1,500% less than 1 year's time.”
In his projection, the trader hypothesizes that bitcoin could grow around 2,500% and that it could reach $382,609 sometime in Q3 of 2021.
That means bitcoin would grow nearly 1,000% from its current price, near $39,000.
The third post of the day comes from the legendary macro analyst and futures trader, Peter Brandt, author and publisher of the Factor Report.
In his post, Brandt highlights an important statistic, one that we think it's important investors and traders understand. Essentially, the macro analyst wrote how bitcoin is defining the meaning of overbought.
Brandt shared a logarithmic chart of the price of bitcoin and added three parabolas, showing how the price tends to grow exponentially once it enters a bull run. These moments are highlighted by the red arrows. Each time bitcoin grew far more than 1,000%, as previously discussed.
The key take from this tweet is that you cannot trust indicators like the Relative Strength Index (or RSI), during major bull runs, since this indicator will flash overbought quite often. This usually means it’s a great time to sell. Unfortunately, this is not the case during periods of Fear Of Missing Out (FOMO), when hordes of new buyers are coming into the market.
The last tweet storm of the week comes from Raoul Pal, founder and CEO of Global Macro
Investor and RealVision.
We believe this post is quite important since it takes a contrarian view to most market players and analysts, who believe bitcoin is a superior technology to most altcoins.
The macro analyst shares his views on network adoption (measured through Metcalfe's Law), and how he thinks that new investors will view ether versus bitcoin. Let’s discuss the thread below.
First, let’s explain what Metcalfe’s Law is. According to Technopedia, “Metcalfe’s Law is a concept used in computer networks and telecommunications to represent the value of a network. Metcalfe's Law states that a network's impact is the square of the number of nodes in the network. For example, if a network has 10 nodes, its inherent value is 100 (10 * 10). The end nodes can be computers, servers and/or connecting users.”
Essentially, Pal connects the active addresses to price, and see how both correlate. The regression shows a clear correlation between the price of bitcoin and the number of active addresses. The more addresses, the higher price goes.
Interestingly, a follow-up chart shared by Pal shows the virality of ethereum when compared to bitcoin, in terms of market capitalization. What the data is pointing to is a far higher probability of bitcoin growing massively, versus bitcoin.
Of course, this data by itself isn’t enough to tip the probabilities in favour of ether. However, what happens if we compare the price growth of ether versus bitcoin?
When Pal compares the logarithmic chart of ether vs bitcoin, it seems an almost exact fit. Meaning, the price of ether is following the price of bitcoin, or so it seems.
If the trend continues, we could see a $20,000 ether by the next cycle top. Of course, that also means that bitcoin will massively grow, since we don’t think ether will overtake much of the total bitcoin market cap.
Perhaps during a short period, but we think the total bitcoin dominance will remain above 50% after the current cycle is over. This means that bitcoin will remain king.
However, altcoins, namely ether, have a greater probability of making higher returns, than bitcoin.
Let’s see at what levels do we think the price of bitcoin will trade during the weekend.
Bitcoin Price Prediction
Recently, the price of bitcoin had an epic surge of more than 8%, and it broke a new price record when it traded at $40,180, according to CoinGecko.
In the past 24 hours, bitcoin’s price traded around $38,500 according to CoinGecko. Not only that, but BTC/USD is up by more than 60% in the past fourteen days, a rather impressive performance.
Yesterday, we predicted the price of bitcoin would make another move toward $40,000 and go above this price range. That’s precisely what happened.
Additionally, we wrote we expect BTC/USD to reach $45,000 soon, perhaps until the end of the weekend, even though there is a slight chance the market corrects between 10%-20%.
The other excellent news is that we confirmed our suspicions that BTC/USD would find support above $30,000 when it had a significant retracement, during the previous weekend.
Therefore, we don’t see how BTC/USD may fall below this critical support level, simply due to the sheer number of buyers around this price range.
Today, we discussed how many traders and macro analysts see the price moving in the long-term: way above $100,000.
How do we think the price will trade throughout the day? Hopefully, BTC/USD will keep its uptrend and go above the $42,000 price range soon. As a top, we don’t think it will go above $45,000 since we think there will be additional sell orders being triggered around this price.
On the other hand, we don’t expect the digital currency to drop much below $32,000 as there are a significant number of buy orders at this support level.
To finalize, the Volume Profile Visible Range (VPVR) shows a high number of buy orders between $28,000 and $26,200 and then again between $22,500 and $23,000, which means BTC/USD should not go below $22,000, even if things deteriorate significantly.
As a reminder, we believe that the price of bitcoin will continue to move up and $45,000 per bitcoin is in sight. Not only that, but beware that a significant correction might take place between $40,000 and $45,000.