What’s Next for Bitcoin, Now that It Broke Through $20,000?
The sky's the limit for the largest cryptocurrency. But where we go to next in the short-term, that’s the next question in everyone’s mind because now no technicals are there to guide the market.
We have already gone well above $23,000, with the ‘real’ trading volume also surging past $11 billion. Antoni Trenchev, the co-founder of crypto lender Nexo, says,
“We have a new line in the sand and the focus shifts to the next round number of $30,000.”
“This is the start of a new chapter for Bitcoin. It’s a narrative the media and retail crowd can properly latch onto because they’ve been noticeably absent from this rally.”
— Samson Mow (@Excellion) December 17, 2020
According to Meltem Demirors, Bitcoin breaking above $20,000 marks an important psychological milestone. She told Bloomberg,
“The biggest thing is the macroeconomic conditions — this is the perfect setup for Bitcoin”
“From here things are going to move very quickly and I wouldn’t be surprised if we touched $35,000 in the next three to six months.”
This week, Bank of America’s survey revealed Bitcoin to be the third-largest crowded trade after long tech and the short US dollar.
It might look crowded to the outsiders, but the market knows that Bitcoin has just started its new cycle. Ed Campbell, managing director at QMA, said,
“People tend to pile into momentum trades, so Bitcoin could have more upside from here.”
Crypto is transiting the first year of a multi-year bull market. The monetary supply has exploded. Stocks are flying. Real yields are negative. Crypto assets are neither in a bubble nor expensive. For as long as real yields don't spike in 2021, should have another great year. pic.twitter.com/wNW18bl8bH
— Alex Krüger (@krugermacro) December 16, 2020
As we have been reporting, institutions lead this uptrend with the retail “out of this rally,” which, according to Kay Van-Petersen, global macro strategist at Saxo Capital Markets, means the “price will now go from linear to parabolic.”
Interestingly, despite bitcoin’s big moves, implied volatility remains muted. The crypto market's low volatility is expected to sustain the largest digital asset’s performance next year.
Not to mention, interest rates will remain at zero and sub-zero while the Federal Reserve announces that they will continue to keep up with its massive stimulus measures.
All of this has Bitcoin’s top in this bull rally anywhere between $100k to $500k and $1 million in an even larger scheme of things.
However, in the short-term, “testing $36,000 will be the next real objective,” if BTC sustains its momentum, said Dan Gunsberg, CEO of crypto trading platform Hxro, adding that a significant break below $13,800 would bring a much weaker period.