The Day Bitcoin Plowed Through $20,000 Followed by a Bashing of $23k
December 16 was the day when Bitcoin finally, after three years, not just hit the coveted $20,000 but smashed through it with great force.
Bitcoin broke multiple levels to make new all-time highs. Now 100% of the addresses holding Bitcoin are in profit as we enter the uncharted territory.
Bulls Turned Savage
Starting the day around $19,400, BTC struggled initially as it oscillated a few hundred dollars only for the bulls to turn savage. First, it burst through $20,000 with $21,000 as the next stop. But this wasn’t the end of the rally, BTC then broke past $22,000 as well, and in the Asian session, it even surpassed $23,000 with a whopping $10.3 billion in ‘real’ volume.
Now, the market is waiting for Thursday to see if we might take a rest after printing the monster of a daily candle of $2,500 or continue going higher and higher.
When assets (any class) break all time highs, they usually continue much higher.
— Charles Edwards (@caprioleio) December 16, 2020
Interestingly, this uptrend not only liquidated shorts but even the longs.
Altcoins also rallied in tandem with Bitcoin, especially Ethereum, which went above $650. Other notable gainers include XRP (23%), ZEN (20%), LTC (16%), and XLM (15%).
This pushed the total market cap past $657 billion, adding $95 billion in a single day.
Could this bull rally get any exciting? Yes, it can, and the Federal Reserve made sure of it for us.
Federal Reserve Chair Jerome Powell held a press conference on Wednesday and said bitcoin would continue higher on. Not really, but he did say that the central bank will continue its extraordinarily high level of quantitative easing until unemployment returns to normal levels.
So, they’ll continue throwing money, which will make its way to markets. As trader and economist Alex Kruger says,
“Be thankful for Jerome Powell. Without the Fed's trillions, we would not be now here.”
Bitcoin – a rising monetary tide lifts all boats
With Fed buying $120b worth of bonds each month, we could be setting up for another parabolic spike. pic.twitter.com/ERq2U6agaM
— Puru Saxena (@saxena_puru) December 16, 2020
“On this momentous $20k day, we also have an FOMC meeting. Which marks the two-year anniversary of a very special FOMC meeting that should be etched in the minds of all Bitcoin-ers forever,” noted Travis Kling, who’s running the Ikigai fund.
USD Shits the Bed
Although it didn't happen while Bitcoin broke the $20k barrier, soon after, the US dollar gave Bitcoin another reason to continue rallying.
The US Dollar Index went down as low as 89.8, a new low of 2020 last seen in April 2018.
This helped even gold to rally to $1,880 but of course nowhere near to bitcoin’s level, which is up 113% in 4Q20 and a whopping 220% YTD compared to precious metal’s 22.3%, SPX 14%, WTI’s -23.8% year-to-date performance.
Buying the Rally
Interestingly, yesterday’s wild rally coincided with lots of people depositing stablecoins to cryptocurrency exchanges. A few minutes before BTC broke $20k, stablecoin inflow addresses count, which points to buying power, jumped aggressively. Ki-Young Ju of CryptoQuant noted,
“Price is all about consensus. I guess the sentiment turned around to buy BTC at that time.”
“ETH block interval is 10-20 seconds. This chart means 127 exchange users worldwide were trying to deposit stablecoins in a single block — 10 seconds,” he added.
Interestingly, 34 new addresses containing between 100 and 10,000 BTC were newly created before this spike, which was the largest gain in addresses since late November.
Exchanges Couldn’t Keep Up, As Usual
Much like any other time, Bitcoin made some big moves in either direction. Cryptocurrency exchanges went down and couldn’t keep up with all the excitement in the market this time.
Coinbase said that its platforms were hit by connection problems and network congestion on Wednesday just as Bitcoin smashed through its ATH. The exchange “implemented a fix” on its retail platform for the congestion problems that delayed the send for ETH and ERC20 tokens.
The incidents have since been resolved.
Hearing reports about problems at Coinbase https://t.co/7wbWeg06bG
— saylor moon (@MoonOverlord) December 16, 2020
Binance also went down with CEO Changpeng “CZ” Zhao, stating, “Experienced some scaling issues…Underestimated demand. Adding A LOT more “servers” still.”
“Bitcoin goes up 5%, traffic goes up 30x,” he said.
It is quite apparent that as Bitcoin bulls beat the shit out of bears, the digital asset starts trending on Twitter. China’s state media CCTV reported Bitcoin’s new all-time high to its one billion viewers.
One word: Bitcoin.
— Edward Snowden (@Snowden) December 16, 2020
Twitter CEO Jack Dorsey gave bitcoin a shout out in his way and tweeted, “Boost Bitcoin and HODL.” Among several Bitcoin-related tweets retweeted by Dorsey, one mentioned Square's Bitcoin position now doubling in value.
Singer Katy Perry’s tweet, however, did give some scare as the last time she gave her nails a crypto makeover, it went all downhill from there. But all is good this time.
Ah shit pic.twitter.com/MC7KyKtJuW
— Emptybeerbottle (@Fullbeerbottle) December 16, 2020
The Party Has Just Started
If you are feeling left out by this crazy price action, you are not alone. At this point, everyone has been having some form of “not enough” going on.
What's happening in every institutional fund manager's mind right now:
Everyone who allocated 1% of their fund in BTC will outperform me by 5% if BTC goes 5x. I need to get my bids filled ASAP.
— Qiao Wang (@QwQiao) December 16, 2020
And this is just the beginning. Bitcoin has only broken out the previous ATH. We have yet to hit the moon and set a new all-time high of this rally. As trader Mr. Anderson puts it,
“If you missed this BTC ALL-TIME HIGH, the good news is there will be 100 more of them in 2021!”
$BTC above $20K. The bull market officially begins…..
— SpartanBlack (@SpartanBlack_1) December 16, 2020
The Moon Targets
Now that Bitcoin has rallied strongly, everyone is coming up with their targets for the next moon level, and $100k is looking more and more conservative.
“It could easily go much higher,” said Samson Mow of Blockstream.
— Mati Greenspan (tweets ≠ financial advice) (@MatiGreenspan) December 16, 2020
Guggenheim's Scott Minerd announced his price target just yesterday at about $400,000.
Another target is by Seth Ginns of CoinFund, according to whom $150k to $200k is just the base case, and we could easily see $0.5M to $1M in the 2021-2022 timeframe.
According to venture capitalist Shervin Pishevar, crypto markets beloved Michael Saylor believes “Bitcoin will one day be worth $1,000,000.”