2020 has been a roller coaster year for many, including many financial assets. To mention a few, The S&P 500, went from 3390 all the way to 2190 ( a drop of 35% ) before recovering and making new highs of 3588. Gold (XAU) reached an all-time high of $2069. Bitcoin too isn’t shy of such movements. Bitcoin went from the sub 10k region to the lowest of 3.8k before recovering back to the same level, a movement of over 65%! With 2020 reaching its final quarters, below are some predictions from a panel of crypto experts rounded up by Coindesk.
Denis Vinokourov, Bequant: The market is testing the upper bounds of its recent range and, with the absence of fresh macro news flow that could dampen the risk-on sentiment, bitcoin may just find enough momentum to break through the $11,000 price level and, more importantly, stay there. Open options interest continues to show signs of recovery.
Charlie Morris, ByteTree: The vast majority of bitcoin’s past gains coincided with periods of a flat or weak dollar. The implication is that bitcoin is likely to be a powerful hedge against U.S. dollar weakness. How likely is that? Quite likely given it is Fed policy.
IntoTheBlock: There are two areas of strong resistance for bitcoin based on on-chain data. The first one is the current resistance it is facing around the $11,000 mark, where 626K BTC has been bought by 1.17 million addresses. This creates resistance from many of these addresses looking to close their positions to break-even. After that, there is another similar resistance level between $11,400 and $11,700 as shown in the graph above. The good news is that past these resistance levels, there is likely to be less selling pressure past $12,000.
Matt Blom, Diginex: Despite the propensity to buy, hold and not move bitcoin, the network remains buoyed by growth. The only thing going sideways in bitcoin is the price.
Jason Lau, OKCoin: Bitcoin’s price momentum is still positive, with its pullbacks leaving higher highs. This is signaling a possible further continuation of this upwards move. Bitcoin perpetual swaps funding rates have started turning positive. This indicates that investors are more willing to go long at current price levels.
George McDonaugh, Keld van Schreven, Kr1 Plc: We are currently seeing some correlation [involving] bitcoin, other digital assets and movements in the equity and gold markets. We expect the trend of strengthening balance sheets and diversification into bitcoin to continue as the world’s monetary policies shift evermore towards unbridled money printing and higher inflation.
QCP Capital: The key support from the early month lows of $10,000 on BTC and $310 on ETH both saw substantial buying demand. This prevented any cascading short gamma selling into quarter-end, which had been our fear if those levels broke.
Constantin Kogan, BitBull Capital: We’re seeing a spike in activity by new participants coming into BTC not yet reflected in the price. It doesn’t happen often. This is what traders call a divergence. In this case, the trend looks more bullish.
Patrick Tan, Novum Alpha: While it may be tempting to subscribe to the notion that bitcoin will represent a safe haven in times of instability, there’s little evidence to support that view — especially since gold, tech stocks, and bitcoin have all tracked each other closely this year. A further round of stimulus, or a smoother than expected political transition, could pave the way for bitcoin to move higher as politicians get past electing and get back to spending.