Bitcoin has been consolidating in price for the past 3 weeks since it hit $42,000 in January 2021.
At the time of writing today’s article the price sits around $33,800 and is starting to experience a slight upwards momentum. I expect Bitcoin’s price will perform very well in February due to a number of reasons, the first of these reasons being the institutional buying of bitcoin is only becoming more and more prevalent due to Bitcoin receiving support from Elon Musk and other well-known and respected businessmen.
As Bitcoin culture grows, I expect the price will grow with it. Bitcoin’s price is an indicator for how adopted Bitcoin is becoming. You can understand how small Bitcoin is right now as people treat it speculatively. How high must the price go before it is no longer speculative and is just an asset that most people have?
The Guggenheim Fund is expected to invest $500m into Grayscale Bitcoin Trust this week. Over the past 2 weeks, Guggenheim has been issuing price targets of $20,000 Bitcoin, coincidentally right before they invest a large sum of money. I expect this has a lot more to do with the price they would like to pay rather than being an actual price target. Using technical analysis, if Bitcoin were to drop back as low as $20,000, confidence would be lost in the market and it is likely that another bear market would ensue, setting Bitcoin back a couple more years. We have seen other large investment banks and institutions try similar tactics to push the price of Bitcoin in their favour but there is only so long that people can wait these days.
The price of bitcoin
The trend in the price of bitcoin is very clear. We are trading in a very bullish fashion and those that expect to buy at a cheaper price know that time is limited and opportunities are few and far between, meaning every time the price of Bitcoin starts falling, the dip gets bought up and recovers very quickly. We have seen this happen time and time again recently and with each dip comes less and less opportunity before the inevitable breakout. I expect the price of bitcoin to continue its ascent to $100,000 in the coming weeks as more institutions see Bitcoin as a viable way of storing value as the realisation kicks in that not all stores of value are material and non-material stores of value are a lot cheaper to buy and maintain.
The DXY (US Dollar Currency Index) is the only thing that could throw a temporary spanner in the works for Bitcoin if it rises back above 91 points. Bitcoiners use the DXY to measure the success of the US dollar. Generally speaking when the DXY is increasing, confidence in the dollar is growing and thus there is less of a need to store value, but with $2 Trillion of stimulus looming in the USA, unless a substantial demand for debt can be acquired it seems unlikely that the US dollar will have anything more than a short-term temporary recovery due to the damage caused.
So what do I expect will happen to the price of Bitcoin? I think Bitcoin looks bullish fundamentally. There is no reason to not be bullish on Bitcoin from my perspective at the moment given the strong bullish current that Bitcoin has. We are far from the top of this bull run. I think this can be witnessed in several indicators like SOPR and NUPL. I still expect to see $100,000 Bitcoin in 2021 and believe with confidence that Bitcoin is performing very healthily consolidating in price until the next institutional buying frenzy!
As for the rest of the market, Altcoins are really starting to move now. Many new people have been tempted into the market over the past week due to the ‘Gamestop’ fiasco triggering an uprising in retail traders that treat the markets like a pump and dump scheme. The mentality is questionable and I hope the movement dies down because it only further delegitimises Cryptocurrency in the eyes of those who have no understanding and scares them away before they get a chance to understand.
I am very bullish on Altcoins in the short term expecting them to take lumps ofutof Bitcoins market dominance. We have seen a lot of development taking place in this market and finally it seems people are taking notice. Eventually Altcoins will form blow off tops and come back down to more sensible levels, but I firmly believe that February will be silly season for Altcoins.
TMG ‘That Martini Guy’ is a British Cryptocurrency Trader & YouTuber that publishes daily Bitcoin & Crypto videos on youtube. In the Crypto Space since 2013 he has vast experience in both Cryptocurrency bull and bear markets having experienced nearly every single one in the history of Bitcoin!