Today, the price of bitcoin surged, following the 13% crash it suffered yesterday.
Additionally, BTC/USD is up more than 10% in 2021, after climbing by as much as 16% since the new year.
As we wrote yesterday, we hope that you’ve taken full advantage of the most recent dip and bought some bitcoin on the cheap.
At the time of this writing, bitcoin is trading around$33,710 and is up over 6% in the past 24 hours. Since yesterday, daily trading volume has dropped from $90 billion to $56 billion, according to CoinGecko.
Just like we predicted yesterday, the price of bitcoin had another minor wick, but BTC/USD remained within the trading range we drew. Currently, there are little reasons to think bitcoin won’t soon go above $35,000.
Today’s price appreciation could be related to the bombshell released by the Office of the Comptroller of the Currency (OCC). As Hailey Lennon wrote in Forbes:
“Today the OCC published Interpretive Letter 1174, which explains banks may use new technologies, including independent node verification networks (INVNs) and stablecoins, to perform bank-permissible functions, such as payment activities. Said simply, a bank may use stablecoins (cryptocurrencies designed to minimize the price volatility) to facilitate payment transactions for customers. In doing so, a bank may issue stablecoins, exchange stablecoins for fiat currency, as well as validate, store, and record payments transactions by serving as a node on a blockchain (INVN).”
What this news means is that banks and other payments and financial institutions may use stablecoins and public blockchain networks to settle and facilitate payments to customers.
Was this the missing ingredient for a push in the adoption of stablecoins and cryptocurrency in general, by banks and financial institutions? We shall soon see.
To conclude our introduction, we think that sellers are being exhausted and new buyers have entered the bitcoin market, meaning we expect the price of bitcoin to surge. We believe BTC/USD may move closer to $40,000 or even go above this critical price range before experiencing another significant correction of 10% or more.
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 ¥3,000,000.
- BTC/USD daily volume goes back above its 21-day Moving Average
What Do Traders Think?
In his post, Elmandjra shares a chart of the Bitcoin Cumulative Adjusted Transfer Volume.
What’s incredibly astonishing is the fact that the Bitcoin network has settled nearly $10 trillion since its inception.
Not only that, but 75% of the total Bitcoin Cumulative Adjusted Transfer Volume took place after 2018.
If the trend continues, we could see the number of settlements massively increasing during the next bull cycle. As the data shows, the higher the price of bitcoin, the more dollar value is settled in bitcoin.
The second tweet comes from Willy Woo, a crypto analyst whose Twitter profile describes him as “pioneering on-chain analysis.”
In his post, Woo shares some relevant statistics about gold, and why bitcoin is poised to surpass gold’s “financial use” market cap.
Woo highlights that only 40% of the total gold in existence is available for financial use since the rest is committed to jewellery.
Therefore, if the gold’s total market cap is estimated to be around $11 trillion, that means gold’s financial use market cap is about $4.4 trillion.
If the price of gold stays more or less equal to what it is today, then once the price of bitcoin reaches $240,000, bitcoin’s total market cap will flip gold’s use as a financial hedge.
To conclude, the analyst stated that this could happen in 12 months.
In the event Woo’s analysis is correct, we advise investors and traders to have a thorough plan put in place, to maximize their ROI when unloading bitcoin for fiat currency.
The third post of the day comes from Mayne, whose Twitter profile describes him as a
cryptocurrency trader since 2013.
Since we’ve been quite bullish on the long-term price action of bitcoin, we believe it’s crucial to present a contrarian view.
In his post, Mayne underlines an important risk factor regarding the short-term price of bitcoin. Essentially, the trader highlights how the price of bitcoin may fall towards $26,000 if it can not hold the $31,000 price level.
We believe the trader is correct in his analysis, and that the likelihood of the price of bitcoin falling to just over $25,000 is high, if the price drops below $31,000.
The most significant number of buy orders appear between $25,000 and $26,000, which means we do not think bitcoin would drop below this support range.
The last tweet of the day comes from Kevin Rooke, who posts about investing and technology.
In his tweet, Rooke shares an important table that shows the top nine funds holding bitcoin, ordered by the size of their bitcoin holdings.
The largest is Grayscale Bitcoin Trust, holding over 607,000 bitcoin, with a current market value of $19 billion. Next is CoinShares, a fund that holds 66,330 bitcoin, with a market value of around $2 billion.
The key statistic—nine funds hold $23 billion worth of bitcoin.
This goes in line with our hypothesis that the current bull run is being fueled by large institutions buying and holding bitcoin.
Now, let’s discuss how we think the price of bitcoin will move tomorrow.
Bitcoin Price Prediction
Recently, the price of bitcoin had a major surge of more than 5%, after it had declined more than 10% yesterday, according to CoinGecko. After reaching a new all-time high during the weekend, BTC/USD had a significant retrace, but it now appears to have completely recovered.
In the past 24 hours, bitcoin’s price traded around $33,700, according to CoinGecko. Not only that, but BTC/USD is up by more than 20% in the past seven days, a rather impressive performance.
Yesterday, we predicted the price of bitcoin would make another move toward $35,000. That’s precisely how the price action is developing.
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. 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.
As we wrote in the previous section, the main reason for the current price surge can be attributed to the epic news that the OCC is allowing stablecoins to settle payments.
How do we think the price will trade throughout the day? Hopefully, BTC/USD will keep its uptrend and go back above the $35,000 price range soon. As a top, we don’t think it will go above $40,000, as that would require an over 15% move.
On the other hand, we don’t expect the digital currency to drop much below $31,000, 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, but traders should remember that the digital currency is quite volatile and could easily experience temporary price drops.