For some reason or another, Bitcoin investors have long gravitated to round numbers. $1, that’s important. $100, make sure you watch that level. $1,000, all hands on deck. According to a prominent cryptocurrency investor and commentator, there’s truth to the importance of these round numbers, especially in this nascent market.Related Reading: Last Weekly Golden Cross Led Bitcoin to Rally 75% Rapidly; Will the Same Happen Now?This would imply that reclamation of $10,000, then $20,000 on macro price scales will mean that Bitcoin has the fuel to shoot higher, potentially until it reaches another important round number.Why Round Number Prices Are So Important for CryptoIn a recent podcast with Luke Martin, Su Zhu of Three Arrows Capital said that round numbers in the cryptocurrency market are extremely important. Zhu claimed that “round numbers have even more meaning in crypto [than forex] because this is what everyone thinks.”
This largely implies that Zhu believes that the leading cryptocurrency topping $10,000 will be an important moment in terms of price action analysis.
It isn’t only Su Zhu who believes that $10,000 is of utmost importance for Bitcoin to surmount.
Earlier this year, Fundstrat Global Advisors’ resident cryptocurrency analyst Tom Lee released an analysis from his firm that implied that $10,000 is the level to watch for the time being.
Fundstrat wrote in the analysis that once BTC tops $10,000, “Level 10” FOMO will grace this market, which last occurred when BTC blipped above $4,500 in late-2017. If history is any guide, the cryptocurrency market will shoot even higher once $10,000 is reclaimed on a macro scale.
As Lee wrote on Twitter earlier this year, “[$10,000] will see FOMO from those who gloated about the 90% crash in BTC… and those who saw Bitcoin dead as forever.”
There’s also Bloomberg, which wrote the following in November on the seeming importance of the barrier between four digits and five:
“Bitcoin faces solid resistance at the $10,000 level, with investors having difficulty valuing it given continuous debate on whether or not it’s an asset or a currency. For many investors, BTC will need to break that barrier for confirmation that meaningful gains could continue.”
Mike McGlone, senior commodities strategist at Bloomberg, last week revealed in his monthly crypto market update that he expects for Bitcoin to top the key $10,000 resistance eventually.
Firstly, he drew attention to the fact that as gold rallies, so too should Bitcoin. While the precious metal is currently trending lower, having peaked last summer in the midst of the trade war talks, the macro picture may start to favor gold (and thus Bitcoin) heading into 2020.
Also, McGlone opined that a perfect storm is building for the cryptocurrency in terms of its “basic premises” — mass adoption and a fixed supply cap. “Bitcoin is winning the adoption race among crypto assets and is becoming increasingly scarce, which favors price appreciation. Plenty can go wrong with a nascent asset, but unless the basic premises reverse, there’s a higher probability to sustain price appreciation vs. depreciation,” he wrote.
The Bitcoin price action throughout 2019 has not inspired that much market confidence. Even Tom Lee, a notorious Bitcoin bull, has grown concerned as to where this currency is headed next.
It is not uncommon for financial experts to weigh in on how markets might evolve in the coming years. Price prediction is not an accurate science by any means, but it can certainly lead to interesting discussions.
The Bitcoin Price Action isn’t Too Exciting
Tom Lee, an analyst for Fundstrat, has built up quite the reputation when it comes toBitcoin pricepredictions.
Although Lee had high hopes for Bitcoin this year and in 2020, he too has to revise those initial expectations.
In his recentupdate, Tom Lee confirms the Bitcoin price will not reach his predicted target in the allotted timeline.
Instead, he decided to drop his prediction to $25,000 per BTC by 2022, rather than $40,000 by late 2019. A very bearish, yet still bullish outlook for the world’s leading cryptocurrency.
This news comes at a time during which the Bitcoin price has shown more signs of weakness.
Despite hitting $10,000 earlier this year, the Bitcoin price remains on very wobbly legs.
Now that one of the biggest bulls is also lowering expectations, a further downward market spiral may very well occur during the remainder of 2019.
It is not the first time Lee decides to put his own Bitcoin price prediction in check as the year progresses.
Throughout the years, he has been wrong about the value of Bitcoin more often than not.
That is in line with most other experts weighing in on this matter, as volatile markets are impossible to predict.
The launch of a U.S.-regulated Bitcoin exchange-traded fund (ETF) has long been the dream of cryptocurrency investors — they believe that such a vehicle would catalyze mass inflows, kicking off BTC’s largest bull run yet. Though, the past few years haven’t been too kind to cryptocurrency ETF hopefuls.Just last month, the U.S. Securities and Exchange Commission, which presides over ETFs, issued a 112-page order denying an application from Bitwise, who asserted this industry is ready for an ETF. Compound’s general counsel, Jake Chervinsky, pointed out that the denial order “reads like a damning indictment of Bitcoin’s market structure.”Related Reading: Bitcoin Mining Now Consumes A Quarter Percent Of Global ElectricityWorse still, the prospect that the Bitcoin market is ready for an ETF recently got even more pushback. This time, the pushback came from a leading cryptocurrency analyst, the “permabull” Thomas Lee of Fundstrat Global Advisors.Bye-Bye ETF DreamsSpeaking at the Blockshow conference in Singapore this week, Fundstrat’s Tom Lee said that the current cryptocurrency market is too small to get its own fund. He claimed that for an ETF to be approved by the SEC, the underlying Bitcoin market will need to be much bigger, at least 18 times larger than the current size. “He estimates Bitcoin needs to be around $150,000 to cope with daily demand on an ETF,” Bloomberg wrote on the matter.This came shortly after Todd Rosenbluth, Director of Mutual & Exchange Traded Fund Research of markets research firm CFRA, argued on CNBC that a cryptocurrency ETF remains a quixotic dream:“It’s not the wrapper, it’s not the ETF product that’s the concern, it’s the underlying asset that the SEC is worried about from a fraud standpoint. They don’t want to pull off that band aid too quickly.”In a sense, then, the launch of a Bitcoin ETF in Lee’s eyes is much like a chicken and the egg scenario: the launch of an ETF would likely expedite a rally over $100,000, which would boost liquidity, though this market is not currently large or liquid enough for such a fund.Related Reading: BTC Open Interest May Act as Rocket Fuel for Explosive Bull MovementIs a $100,000 Bitcoin Possible?This may leave you wondering — is a $100,000+ Bitcoin price even feasible?Per previous reports from NewsBTC, $100,000 is decisively possible. PlanB’s stock-to-flow scarcity model for Bitcoin, which uses the cryptocurrency’s stock-to-flow ratio and relates it to BTC’s market capitalization, for instance, implies a six-figure price for the cryptocurrency is on the horizon.Related Reading: Former ECB President’s Statement Shows Bitcoin Does Have Impact on the EconomyThe linear regression model, which produces a 95% R2 (statistic lingo for extremely accurate), predicts that BTC’s fair value will reach somewhere between $50,000 and $100,000 after May 2020’s halving event. The idea here is that the halvings, which reduce the number of coins minted per day by 50%, will cause a negative supply shock, pushing prices higher should demand for BTC remain.As absurd as this may sound, PlanB’s research has also found that the price of Bitcoin always trends towards the fair value indicated by the model with ample time.Stock-to-flow model has a lot of proponents, but not everybody is a fan. For a balanced view here are some of the most well known people against S2F:https://t.co/p2cLe7uGIDhttps://t.co/WlYSChAfVthttps://t.co/TzRLfxRZ9E Tell me what you think. And .. did I miss anybody? pic.twitter.com/PthuHUvrlP— PlanB (@100trillionUSD) October 29, 2019It isn’t only Bitcoin’s scarcity that implies $100,000 is on the horizon. Cryptocurrency investor Anthony Pompliano told CNN over this year that he thinks that the increased liquidity and inflation risk created by central banks and the fiat system will boost BTC sky-high in the years to come.Featured Image from ShutterstockSource