The price of Bitcoin (BTC) has surged in previous months, rising from $10,000 to its recent all-time high of $24,200. An analyst said the next level of interest would be at $25,800, which could be the next marker for a potential peak. Bitcoin Forecast Poll of experts’ expectations on all timeframes turned out to be optimistic, more than half of respondents expect the price of BTC to rise. Participants bet on Bitcoin to grow above $24,000 in a month and quarter.
On-chain data adds confidence to Bitcoin’s optimistic forecasts. Historically, the peak of three different metrics coincided with the previous all-time high of BTC. Trading volume, social volume, and daily active addresses all experienced a simultaneous surge during the 2017 bull run. The news that One River Asset Management has acquired $650 million of BTC and plans to increase the stake to $1 billion over the next months added more bullish credence to BTC’s outlook.
Also, convincing fundamental data and statistics show that the price of Bitcoin has not yet experienced astronomical growth. On-chain data shows that the demand for the lead crypto is outstripping its supply. Blackrock Chief Investment Officer Rick Rieder cites the Bitcoin supply shortage as one of the major selling points.
Overcoming the psychological resistance level of $20,000 was the hypothetical start of a new bull cycle. This narrative creates an opportunity to see new highs that will overshadow previous records.
Although the rally is similar to the 2017 rally when the market frenzy raised BTC to $20,000 before Christmas. Institutional buyers are driving the market this time as the retail crowd that triggered the previous boom was unable to support or reverse the trend. There are currently large institutional players in the market such as MicroStrategy, PayPal, Square, and One River Asset Management, among others.
BTC/USD Daily Chart
Bitcoin trades at $23,838 after reaching new historic highs of $24,200 on Coinbase.
Here Are Two Key Trends to Watch Out For
Institutional Interest in Cryptocurrencies: This should grow in 2021. Buying Bitcoins is the third most popular transaction among asset managers surveyed by Bank of America. A recent study by a financial institution showed that Wall Street’s interest in cryptocurrencies is on the rise, pushing BTC prices to record highs. The outcome of the Federal Reserve meeting is critical for investors as quantitative easing could catalyze inflation.
This development could lead to a new surge of institutional companies that use Bitcoin as a safe-haven, leading to even more price increases in the coming months.
Andrew Peel, head of digital asset markets at Morgan Stanley, said that significant interest in decentralized finance (DeFi) is expected to continue to grow in 2021. Meanwhile, top DeFi tokens like Yearn. finance, Uniswap, and Sushiswap continue to post impressive profits.
Bitcoin-Tether Divergence Indicator: Bitcoin’s recent surge past $24,000 was preceded by Tether’s market cap reaching $20 billion. According to data confirmed by Tether’s parent company on Dec. 18, the largest cryptocurrency Stablecoin surpassed a $20 billion market cap for the first time.
Major changes in Tether’s market capitalization have led to Bitcoin’s price over the last 2 years as noted by Charles Edwards, a digital asset manager referring to it as the Bitcoin-Tether divergence indicator. Historically, Bitcoin typically rallies when Tether (USDT) metrics climb.
Image Credit: Shutterstock