Strategists at BTIG are convinced that Bitcoin has finally “come off age” and will be making an upward price movement in the future. Now, they are setting a $50,000 price target on the premier cryptocurrency by the end of 2021.
Bitcoin’s journey to the moon
Bitcoin has been reaching new highs towards the end of the year. According to Coin Metrics, the cryptocurrency topped its 2017 highs of $19,000. The price movement of the coin has constantly gone northward. After it reached the $19,000-mark last week, it took a small backward tilt to $17,000 before eventually reaching highs over the weekend.
However, the 2020 bull market is very different from the 2017 market. The 2017 bull market was a result of frenzied trading as the crypto asset grew into a bubble that eventually popped in 2018. However, this time, the price rise is fueled by increased investments in the cryptocurrency from institutional investors. Moreover, governments and major investors, especially in China, are also showing more interest in the digital coin.
Other bullish predictions
BTIG is not the only bullish prediction in the cryptocurrency space. Other analysts are also giving their bullish predictions about the cryptocurrency for 2021. Citibank analyst Tom Fitzpatrick has an even more mind-boggling view. He recently wrote a note in which he detailed how Bitcoin could hit $318,000 by the end of 2021.
Most predictions are taking better crypto adoption as one of the primary reasons behind this goal. The growing number of crypto transactions on Square and PayPal’s interest in digital currencies is showing a real-world use case for Bitcoin which will make it a part of everyday life. Fitzpatrick also suggests that looking at the movement of Bitcoin between 2010 and 2011, it is possible that the same trajectory repeats in 2021 as well. The impact of the coronavirus and the actions taken by the US Federal Reserve will play an important role in this.
Mining difficulty saw a sharp rise yesterday as Bitcoin saw its “Thanksgiving price slump” over the weekend
The rise in mining difficulty comes as Bitcoin tries to settle just above $18,000 following a week of massive surges and dips. Last week, Bitcoin price broke into the $19,000 level but plunged to below $17,000 afterwards.
Data from crypto analytics firm Glassnode showed mining difficulty on the network was approaching its all-time high after an 8.9% increase yesterday alone. This sharp swell put the current difficulty level within 5% of its all-time high value that was seen last month. The network’s hash rate is now north of 130 EH/s.
“#Bitcoin mining difficulty increased by 8.9% today. It is now only 4.4% below its ATH,” the on-chain analytics firm posted on Twitter.
The possible effects of the increase in mining difficulty
Judging from history, an increase in mining difficulty has signified the onset of the bullish run. This was the case in 2013 and also in 2016. At the moment, it remains uncertain if the recent upswing in BTC price to within range of its all-time high is a long-term bull cycle.
Although Bitcoin had a great upward momentum last week, its price plummeted by slightly over 10%; the result of several Bitcoin whales transferring their holdings onto exchanges. Bitcoin price, as of writing, is $18,650 — up 4.96 % in the last 24 hours.
The increased mining difficulty on the network can have a huge impact on the cryptocurrency. It could potentially result in higher fees for users as well as increased block generation time. It could also lead to an increase in the number of unmined transactions in the crypto’s mempool.
Bitcoin isn’t the only crypto seeing a rise in mining difficulty
Ethereum also posted an increase in mining difficulty recently. Glassnode revealed that the mining difficulty for the blockchain surpassed a two-year high at the end of last week. This came after ETH price dropped from over $600 at the start of the week to $513 by mid-week.
“#Ethereum $ETH Mining Difficulty just reached an ATH of 3,719,917,244,648,520. Previous ATH of 3,696,664,670,930,580 was observed on 04 August 2018,” Glassnode alerts wrote.
Ethereum is currently changing hands at $586.04, having climbed up 8.30% in the last 24 hours.
According to the data compiled by a financial comparison platform Bankr.nl, the top 10 companies hold 830,433 bitcoin, currently worth approximately $15 billion. Grayscale is at the top with 509,581 BTC.
The platform released a report on Monday that shows the dominance of leading firms. The mentioned companies are holding nearly 4% of the total bitcoin supply. A total of 6 out of the top 10 companies are from the US.
US companies include, Grayscale Bitcoin Trust (509,581 BTC), Block.one (140,000 BTC), MicroStrategy (38,250 BTC), Galaxy Digital Holdings (16,651 BTC), Stone Ridge Holdings Group (10,889 BTC) and Square inc. (4,709 BTC).
The top 10 list includes companies from the UK, Switzerland, Canada and Germany. UK-based CoinShares and Switzerland-based, the Tezos Foundation holds 69,370 BTC and 24,808 BTC, respectively.
As of writing, the combined value of bitcoin holding of the top 10 companies exceeds $15 billion.
“The accumulation of Bitcoin by the highlighted companies spells good fortunes for the asset in regards to the elusive mainstream adoption. It is worth noting that, currently, the future price of Bitcoin remains debatable, but the companies demonstrate that holding Bitcoin is less risky than not having any,” the official report states.
In recent months, US-based investment firms and technology companies have taken significant measures to increase bitcoin holding. Finance Magnates reported today that Wall Street’s leading asset management firm, Guggenheim Partners filed with the SEC to seek 10% investment exposure in Grayscale Bitcoin Trust, an amount roughly equal to $500 million as of now. The recent flurry of investments in digital assets indicating that the companies will keep accumulating crypto assets in the future to take advantage of the limited supply.
“The acquisition of a significant amount of Bitcoin is an indicator that institutions are moving towards holding Bitcoin instead as opposed to cash-settled futures. Overall, the integration of institutional investors into the crypto ecosystem and their interest in holding is a positive sign for the asset’s prospects as another form of currency,” the report cites.
Bitcoin (BTC) Price Prediction – November 29, 2020 On November 26, after the breakdown, the bearish candlesticks were closed with long tails. The long tails indicate that the bulls have bought the dips as the support level holds. Today, BTC/USD is trading above the $18,000 price level. Bitcoin is moving up to retest the previous highs.
Resistance Levels: $13,000, $14,000, $15,000 Support Levels: $7,000, $6,000, $5,000
Bitcoin upward move above $18,000 is facing rejection. Today, a candlestick with a long wick pointing at $18.300 is facing resistance. It indicates that there is selling pressure at that price level. Similarly, on November 18, at that price level, buyers were repelled. However, after a pullback the resistance level was retested and broken. On the upside, if the bulls can push BTC above $18,300, a rally above $19,000 is likely. However, if buyers fail to resume the upside momentum, Bitcoin will be compelled to a sideways move. Perhaps a downward movement of the coin is likely.
Bitcoin (BTC) Indicator Reading The 21-day SMA and the 50-day SMA are pointing northward indicating the uptrend.The 21-day SMA is acting as a support for the BTC price. A break below the SMAs means a downward movement of the coin.Meanwhile, BTC price is above 80% range of the daily stochastic. It indicates that the coin is trading in the overbought region of the market.
Nevertheless, buyers are attempting to push BTC on the upside. The Fibonacci tool indicates a possible move of the coin. On November 18 uptrend; the retraced candle body tested the 78.6% Fibonacci retracement level. This retracement indicates that the market will rise to level 1.272 Fibonacci extensions. In other words, Bitcoin will rise to $19,145 and reverse. BTC price will reverse and return to the 78.6% Fibonacci retracement level where it originated.
Bitcoin price started a fresh increase from the $16,200 support zone against the US Dollar. BTC is up 5% and it is trading above $17,500, but facing a major resistance at $18k and $18.2k.
Bitcoin started a fresh upward move above the $17,000 and $17,200 levels.
The price is now trading nicely above the $17,500 resistance and the 100 simple moving average (4-hours).
There was a break above a major contracting triangle with resistance near $17,200 on the 4-hours chart of the BTC/USD pair (data feed from Kraken).
The pair could revisit the $18,200 resistance, where the bears might put a strong fight.
Bitcoin Price is Rising Steadily
This past week, bitcoin saw a sharp downside correction below $18,000 and $17,200 against the US Dollar. The BTC/USD pair even broke the $16,800 support and the 100 simple moving average (4-hours).
It traded as low as $16,219 before forming a support base. A fresh increase was initiated above the $16,500 and $16,800 resistance levels. Bitcoin price cleared the $17,400 resistance and 100 simple moving average (4-hours) to move into a positive zone.
There was also a break above a major contracting triangle with resistance near $17,200 on the 4-hours chart of the BTC/USD pair. The pair is now testing the 50% Fib retracement level of the downward move from the $19,500 swing high to $16,220 swing low.
A clear break above the $17,850 and $18,000 levels might lead the price towards the key $18,250 resistance zone. It is close to the 61.8% Fib retracement level of the downward move from the $19,500 swing high to $16,220 swing low.
A successful break above the $18,250 and $18,400 levels is needed for a fresh rise towards the $19,000 and $19,500 levels in the coming sessions.
Another Drop in BTC?
If bitcoin fails to clear the $18,000 and $18,250 resistance levels, it could start a fresh decline. An initial support is near the $17,500 level or the 100 simple moving average (4-hours).
The first major support sits at $17,400 levels. A downside break below the $17,400 level could lead the price towards the main $16,800 support level. Any more losses might call for a new low below $16,200.
4 hours MACD – The MACD for BTC/USD is slowly gaining momentum in the bullish zone.
4 hours RSI (Relative Strength Index) – The RSI for BTC/USD is rising and it is above the 50 level.