Bitcoin Re-Accumulation Makes $200k per BTC by the End of 2021 Look Conservative, On-Chain Analyst
Since last week, Bitcoin has been on a rollercoaster ride.
It has been late on Wednesday night, last week, that the price of the digital asset went down hard, to nearly $16,300 right after hitting $19,500.
This week started in a similar fashion, up to a new high around $19,850 only to come back down to $19,075. Yesterday, we went even higher to above $19,950 followed by a sharp retracement to $18,270.
“The price remains highly volatile and draw-downs can be sharp, but volatility is important for the asset to scale, seek price discovery, attract attention and education and over time this volatility should subside,” said Davy Research analyst Roland French, according to whom, the sell-off was likely due to profit-taking.
As of writing, BTC/USD has been trading below $18,900 with a $4.29 billion volume.
With all exchanges' inflow mean surging to 32 BTC, the picture is not looking good for Bitcoin yet. According to Ki Young Jo, the CEO of data provider CryptoQuant, the three possibilities for this BTC whale deposits could be another dump, an alt season, or whales simply preparing in case of emergency.
Amidst this short-term backdrop, on-chain analyst Willy Woo shared a dose of hopium with his Top Model suggesting $200k per BTC by the end of 2021 now looking conservative.
“$300k not out of the question,” he said adding “I've never been so bullish for 2021.”
This bullishness is because of the re-accumulation phase which is coinciding with spot market inventory depletion which is twice as long and deeper than the last cycle. Not to mention, HODLers are holding stronger “pointing to reflexivity increasing; an amplified 2021 bullish feedback loop.”
All that is working for Bitcoin
Amidst Bitcoin’s struggle to break the $20,000 successfully and on strong volume, the US dollar is keeping around its two and a half year low while investors’ risk appetite returns as further fiscal stimulus talks resume and expectations of a solid global recovery increases.
For the first time since the election, US House of Representatives Speaker Nancy Pelosi and Treasury Secretary Steve Mnuchin held stimulus talks. After the talks, Pelosi said Mnuchin would review coronavirus relief proposals — the proposed relief bill of $908 billion would fund measures through March 31.
Fed Chairman Jerome Powell along with Mnuchin urged Congress to provide more help for small businesses.
The Fed will also be meeting to set policy on Dec. 15 and 16. “There's a general view that there'll be something in the December meeting…given there's no real fiscal development in the last few months,” said BNZ senior markets strategist Jason Wong.
In his remarks on Monday, Powell said “challenging” few months lie ahead and “a full economic recovery is unlikely until people are confident that it is safe to re-engage in a broad range of activities.”
Meanwhile, the Bank of Japan’s deputy governor said the central bank would “take additional easing steps without hesitation as needed.”