Bitcoin analysis: will the end of 2020 be marked with a new BTC all-time high?
Bitcoin price hits a new milestone in 2020
To say that Bitcoin (BTC) has performed rather impressively in 2020 is a major understatement. The coin has had a lot to deal with but, despite all the pressure, it still managed to come out on top.
But, let's start at the beginning and work our way through to recent events.
In January 2020, the Bitcoin price still sat quite low compared to the highs seen in the year before. The price started the year just above $7,100, although it did not stay down for long. A market rally started soon after, taking the coin up to $10,200 in only six weeks, by mid-February.
The surge was followed by a correction, which turned into a major price crash in mid-March, as Covid-19 fears caused the global economic meltdown, which briefly affected the crypto market. However, after hitting bottom at $5,000, Bitcoin and the rest of the market started a long and steady recovery.
By mid-May, the BTC price almost reached $10,000 again. Unfortunately, this resistance level proved to be out of reach at the time, and so BTC spent the first half of this year's summer balancing between $9,200 and $9,700. In July, the price was on the lower end of this range, threatening to break its support and once again spiral downwards.
However, this did not happen. Instead, the BTC price once again saw a hike in late July, finally breaching the $10,000 resistance. It did not stop there, however. Instead, it kept going higher until it was stopped by its next resistance at $12,000. It remained below this level for about a month, mostly seeing smaller fluctuations in mid-$11,000s, before attempting to breach the $12,000 barrier in the early days of September.
That attempt ended up costing it a lot, as the price got rejected enough for it to drop down to $10,000. BTC then spent yet another month without major movements, building up its strength, which leads us to a rally that started in the first week of October 2020.
Around October 8, the BTC price started climbing, and it breached one resistance after another, occasionally stopping for a brief moment before each of the barriers gave in.
It was back at $11.500 by October 12. It broke the resistance at $12,000 by October 21. It breached $13,000 by October 22 and, by November 24, the price climbed up above $19,000.
Following this height – which was not seen since December 2017 – the BTC price saw a correction that took it down to $16,600, although only briefly. A few days later, in the last days of November, the price skyrocketed once again, breaching the resistance at $19,000 and surging further up.
It did not hit $20,000 – not yet, anyway – but we did get a new BTC all-time high (ATH) for the first time since December 2017, at the price of $19,845.98, according to CoinMarketCap.
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What else has been happening to Bitcoin in 2020?
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While the coin's price performance has been rather impressive to watch as it progressed from $5,000 to more than $19,000 for the second time in four years, it is important to recap what factors have fuelled this rally.
For example, one of the major developments in 2020 was the fact that companies such as Grayscale and MicroStrategy purchased massive amounts of BTC for their clients. This was greeted as a positive development, indicating that institutional investors are truly becoming interested in working with cryptocurrency and owning it, even though through an intermediary.
Then, the Covid-19 pandemic which spread across the world led the entire crypto market to crash, alongside the traditional financial industry. However, the quick recovery of crypto caused many big names from traditional finance, such as Paul Tudor Jones, to change their tune about digital coins.
Investors started going primarily after BTC and gold, seeking safe-haven assets, as equity prices plummeted across the globe. Wrapped Bitcoin (wBTC) on Ethereum blockchain started receiving a lot more attention, as the DeFi industry began to rise.
But, before that, in mid-May, Bitcoin finally saw its third halving – a process that cut its block rewards in half. After that, BTC traded sideways for several months, while the attention shifted to CBDCs (Central Bank Digital Currencies), at least until October of this year, when the coin's price started surging once again.
Another major event that is likely to have a major impact on BTC is the fact that PayPal (PYPL) added support for the coin only a few weeks ago. For now, BTC is only available in the US, although it will eventually become available worldwide in early 2021.
All of this has caused a surge of headlines regarding Bitcoin trading analysis, which leads us to early December, when Bitcoin price reached a new record high.
Bitcoin analysis: can it finally break through the $20,000 mark?
Earlier this year, many analysts were expecting BTC to potentially target its old ATH, but nobody predicted it to surge so high, so quickly. The coin's price doubled in value over the past three months, from near-$10,000 to almost $20,000.
With the new Bitcoin all-time high finally becoming a reality, the demand for Bitcoin technical analysis and Bitcoin chart analysis skyrocketed. Analysts and experts of the crypto industry rushed to provide their opinions on what is going on, and what might happen in the near future.
On December 3, Capital.com’s chief market strategist, David Jones, also shared his view on the coin’s recent fluctuations and provided a suggested trading set-up in a video titled "Bitcoin Price Analysis December 2020".
The big question now is: where to next for the BTC price? Will the coin simply crash again, like it did the last time, or is this just the beginning of a stellar bull run?
Where is the BTC price going from here?
David Jones believes that $20,000 is a key level – a psychological level, the one everyone is watching and waiting for. But, he also spoke of several other levels, such as $25,000, which is another psychological level that is likely not out of bounds, given that the surge continues.
He also spoke of several supports, such as $18,120, which was the December 1 low, as well as $16,160, which was the November 26 low. He noted that these supports might be good stop-loss levels.
Turning back to the Bitcoin chart analysis, he noted that the Bollinger Bands were extremely tight between late September and mid-October, only to go wider in November and early December, with the bottom of the band being at around $16,000. He also said that a potential correction, if it were to happen, might take BTC down to mid-$18,000.
Lastly, he noted that other indicators, such as 10-day RSI, pointed that BTC was overbought since mid-October. However, the market made a new high at the same time as the RSI made a lower high, which he sees as a warning that the price might be losing its strength. So, in case a sell-off does occur, he expects the price to drop somewhere between $16,500 to $17,500.
In the meantime, TradingBeasts' Bitcoin price prediction for December 2020 expects the coin to end the year at an average price of $16,151 – not far from what Jones predicted in the case of a sell-off.
If true, TradingBeasts predicted that the price will climb throughout 2021, albeit gradually, ending the next year with $18,413. Eventually, the price is expected to once again breach $20k in June 2022, and end that year at $22,325. It will also continue to grow in 2023, ending the year with a price of $26,774.
Wallet Investor has a more optimistic forecast, expecting BTC to hit $20,362 in December 2021, and $28.099 in December 2025.
Finally, there is CryptoGround, which has the most pessimistic prediction for the near future, expecting the BTC price to drop back below $10,000 these days, and to climb back up to $11,000 in six months. This forecast expects to see BTC at $12,523 in December 2021, and at $29,302 in December 2025.
Read more: Bitcoin price prediction 2021: unanimously strong, but to what extent?
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