Bitcoin: What Will Be Needed Above $ 20,000
2017, the historic bull-run year, was also the year of icos. On the contrary, while 2018 was the year of big decline, 2019 was the year where bold HODLers and weak hands sold Bitcoin.
However, 2020 may be the year of a price rally that polarized in Bitcoin history. It can be seen as a year of mainstream adoption, dialogue and key institutional engagement. Even now, there are strong entries into exchanges and a sharp drop in sellers that bought Bitcoin in the $ 8,000 to $ 12,000 range. All purchased for over $ 12,000.
According to data from Glassnode, the percentage of active supply purchased over the past 2 years has dropped to levels not seen since 2018. In addition, the open position and trading volume in derivatives exchanges are decreasing. The primary reason may be increasing profit taking opportunities in altcoin markets.
Some of the market’s altcoins such as LINK, ADA and XRP have offered double digits or higher returns in the past 2 months. These developments may have changed the focus and wallet balance of investors on exchanges in order to make a quick profit. As more central banks buy Gold in the last 6 months of 2020, more institutions bought BTC and added to the existing reserves of institutions such as MicroStrategy.
Price Discovery Above $ 20,000
Interestingly, the support point for 2020 is set at a solid $ 10,000, according to a recent Bloomberg report. Price discovery above $ 20,000 comes with several resistances. But it can stimulate more buying requests from institutions and allow the price of the cryptocurrency to reach a new ATH and eventually exceed $ 20000.
Beyond $ 20,000 lies an unexplored region unfamiliar with the crypto asset. Institutions such as MicroStrategy purchased $ 60 million worth of Bitcoin for an average price of $ 19,400 per Bitcoin. And as the crypto asset is heading towards $ 19,500 every day, the volatility and hype in the current cycle is somewhat surprising and close to normal compared to 2017. Actually, according to Santiment, the hype may have decreased. Because the price is approaching $ 20,000 but does not exceed it.
Although Bloomberg set the target resistance level for 2021 at $ 50,000 against a market cap of $ 1 trillion, the truth is that Bitcoin is still 64.6% below the target at the time of writing.
Just as the 2017 progress in the Bitcoin rally followed the supply decrease in 2016, a similar series of events occurred in 2012-13. If demand remains consistent and the macroeconomics remains positive, higher resistance levels and price discovery above $ 20,000 could be a reality for Bitcoin in 2021.