Bitcoin is an arms length away from its all-time high of $20,000. Will bitcoin make history in this run up or will the digitally scarce asset take a breather before inevitably grinding higher?
Today, bitcoin exchanged hands over $19,000 for the first time since December 2017. Since then, it briefly fell below the milestone figure before pushing right through it again. Bitcoin is now trading at $19,100.
The cryptocurrency is up 1.5% on the day, according to Coingecko—and 13% in the last week.
Since the March 12-13th sell off, our weekly newsletter has been calling for all time highs in 2021, but bitcoin might get there quicker than anticipated. There is now increasing evidence that bitcoin’s uptrend is not only real, but undervalued.
When market structure in any given asset breaks prior macro highs a common misconception is that the ‘bull run’ is coming to an end. On the contrary, breaking market structure towards never seen before prices is almost certain to lead to even higher prices. Of course, timing such prices is subject to a lot of debate, but professional traders and investors with experience would certainly agree.
$20,000 is the next stop.
The next all-time high will not be the same as the last cycles, as history does not repeat itself. However, given the underlying fundamentals once can expect a similar transition towards new all time highs.
Bitcoin trading volumes are also beginning to pick up. Last Wednesday, as bitcoin broke the $18,000 mark, volumes rose considerably from $20-30 billion to $49 billion. Just yesterday, volumes corrected somewhat to $42 billion—but are still higher than usual. Increasing trading volumes are important signals which confirm that a trend is fuelled by real demand, not derivatives.
As bitcoin’s price increases, so has its market capitalisation. Per the newsletter, bitcoin overtook the largest bank in the world – JP Morgan – valued at $350 billion in market capitalisation.
Various factors have contributed to the crypto rally, including investments from large companies along with support from payments giant Paypal. Just this week, Paypal announced that it sees major usage for cryptocurrencies moving into 2021, saying that it will allow its 320 million users to use cryptocurrencies to fund their operations.
Meanwhile, bitcoin’s ‘halving event’ has squeezed the bitcoin supply once again. As more interest enters the bitcoin and crypto space, the supply of newly minted bitcoin has quite literally halved.
In late 2017, amid the crypto’s historic parabolic move, bitcoin’s registered all-time high was roughly $20,089 per coin on December 17th. Shortly after that, the sharp corrective trend began, pushing bitcoin to $4,000 at the end of 2018.
If history is a lesson, $20,000 is just the beginning, and if 2017 is to play out again, then one can expect bitcoin to come back to lower levels at some point. However, nobody knows where bitcoin could top out, and in there lies the risk many would be put off by.
But ask yourself: would you rather keep a volatile scarce asset that appreciates over time or one that’s infinitely available that devalues over time?
The future is here. You need only reach out and take the opportunity before you.
This is not financial advice.
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