Three Key Reasons the Price of Bitcoin Will See $20,000 USD Sooner Than You Think
Bitcoin hit a new 2019 high when it hit $5796.63 yesterday. This has pushed Bitcoin into having a year-to-date increase of 54.08% It is all the more impressive when looking at the digital asset's total recovery which is 82 percent.
There have been a number of research companies that have proclaimed that Bitcoin has bottomed and that bears are dead in the water. They have all used slightly different models to show their views but all of them agree on one thing. Bitcoin has bottomed. That means it is time for a bull market to take hold and the last time Bitcoin felt bullish it was a crazy ride that rocked the entire world. Could it happen again is what many are asking themselves and the answer is an emphatic yes.
Moving Averages Mimic 2015
The author of Factor Trading, Peter Brandt, is certain that Bitcoin will hit $19800 sometime in the near future. His prediction is based on a moving average indicator which is currently trending below Bitcoin's spot price. This, he argues, happened in November 2015 that saw Bitcoin march steadily to $19800 from a starting point of $340.
This lines up strongly with Fundstrat research into the matter. The research firm says that before it breaks $6000, Bitcoin could pull back slightly to its moving average. Then it would enter an accumulation phase that would push it beyond the $20000 mark that it had come close to before.
Simply put, they both believe that with Bitcoin being above its 50 Week Moving Average signals a bull market and with Bitcoin, that means it could potentially go all the way (again).
Relative Strength Index Jumps
Bitcoin Relative Strength Index has jumped up. In fact, it's jumped up to 53.65, which is at its highest level since October 2015. That is important because it indicates that the buying sentiment in the Bitcoin market has improved. When it drops below that point, such as January 2018 it triggers a sell-off pressure and we all know what happened in January of 2018.
Bitcoin Has Created A Golden Cross
The Golden Cross is what happens when an asset's short-term moving average jumps above its long-term moving average. Again, October of 2015 is significant because it is the historical point where Bitcoin started moving upwards massively and went on an extended bull run. This April, that all happened again and it is a clear indicator that the market is moving into a bull run.
External Factors Must Not Be Overlooked
All those reasons are based on looking at the trading market for Bitcoin, but there is another way to look at how Bitcoin is behaving with regards to price pressures. There are three things that need to be taken into account here that show that Bitcoin's price is only going to continue to rise.
The first is the increase in the usage of Bitcoin among ordinary people. The troubles in Venezuela and Turkey have seen more and more people start using Bitcoin in their daily lives. This constant demand and increase in transactions are slowly but surely pushing the price of Bitcoin up naturally. The use cases are increasing and Bitcoin's intrinsic value is along for the ride.
The second aspect outside of the trading market is the emergence of institutional investors. A lot of money is being poured into Bitcoin from immensely powerful financial firms that previously had no interest in digital assets. NASDAQ is trialing Bitcoin futures on its platform and Bakkt is closer than ever to receive a license to sell Bitcoin directly to large investment firms such as pension and mutual funds. Bakkt is a joint venture with the parent company of the New York Stock Exchange, Intercontinental Exchanges, and is aiming to be more than just another exchange. They plan to use their experience to introduce Bitcoin as a means of payment in the US, which would see Bitcoin become a true force in the financial world.
Lastly, there is the technology aspect to consider. No matter how difficult regulators are making a life for Bitcoin, there will always be an economic incentive for people to use it simply due to the technology. If the governments behind the regulations wanted to slow down Bitcoin, they are going about it in the wrong way.
What they need to do is offer a better, easier and more functional technology and that is not happening any time soon. While there are many private companies that are experimenting with blockchain, no one wants to get involved with cryptocurrency and it's precisely where Bitcoin reigns supreme.