Bitcoin has just reached a new annual peak. Will it be able to reach an all-time high in 2020? Here’s an analysis to find out.
With the appetite for investment risk increasing, Bitcoin took advantage and jumped to $15,000, leaving that previous all-time high of almost $20,000 as a very close goal.
If we talk about the fundamental basis behind BTC’s bullish rally, from my perspective, it’s largely anchored to the operation of this asset as a store of value.
Currently, although we are seeing a fairly developed upward momentum, it is not unreasonable to think that it will spread further.
A correction is healthy at this time, but what assures us that it will happen soon, and if it does, it may not be necessary to seek demand far downstream.
Bitcoin Reaches $14,000 Again
Technical aspects indicate that it is not difficult for Crypto Trader to seek a historical maximum in 2020
The list of metrics, data, indicators, and fundamentals that support a long term upward view is really extensive, but it would make this article endless to try and review them all here.
The bullish rally we are witnessing is looking more and more like 2017. And it is worth remembering that at that time, despite the fact that there were small corrections before reaching $19,000, it only took 7 days to go from the price at which BTC is today, to the historical maximum.
There are some key indicators that show us why a historical maximum of Bitcoin is very feasible for the current year, and that also give us data that is really easy to digest.
There are 3 that we are going to analyze today, and we list them below:
Long-term RSI has a lot of room to continue rising
When we think of the current price of BTC, for many it may seem really high, and a correction looks most likely.
While this is true, we should not expect much setback before we look for a new historical high.
For while collective thinking sees the upward momentum not stop, this is only what is perceived when we look at small time frames.
In the long run, the momentum that is developing still has plenty of room.
In Bitcoin’s long-term relative strength index, recently shared by the renowned Plan B analyst, we see how the price is currently just somewhere in the middle. Quite far from being overbought as it was at the historical high reached in 2019.
Bitcoin’s relative strength index. Source: 100trillionUSD. Bitcoin Relative Strength Index. Source: @100trillionUSD: 100trillionUSD.
BTC reserves in exchanges plummet
One indicator that shows us the activity of the holders is the amount of Bitcoins available in exchanges. It shows how the supply is decreasing, while the institutional demand is growing at a fast pace.
In the graph provided by Glassnode of this indicator, we can see how the largest percentage drop of BTC units available in exchanges is occurring.
Lately we have been seeing how large institutions are entering this market and hoarding large amounts of BTCs. Knowing that it is supply and demand that determine prices, clearly the largest of the crypt-currencies is in an advantageous position today, strongly influenced by users who use it to store value and who have a long-term vision.
Bitcoin reserves in exchanges. Source: Glassnode. Bitcoin reserves in exchanges.
Grayscale could soon control 5% of the circulating Bitcoin supply
If we look at the monthly Bitcoin vs.
With today’s behavior of BTC, reaching a new annual peak, the price is surpassing the last relevant monthly barrier, located at $13,880.
At the top, there is only the historical maximum zone next to the $20,000, one that will probably be reached and surpassed without major problems.
If we look at the Bitcoin price from the monthly chart, we see that the upward momentum of the long term trend is just beginning; and you should be looking for a new high above that previous historical high.
According to Adam Back, renowned Cypherpunk and creator of the hashcash used in Bitcoin, after comparing the average performance of the previous 2 bull runs, he believes that the momentum that seems to be starting should be looking at an ATH of $320,000 sometime in 2021.