According to one analyst, Bitcoin bulls are over-expectant of “political headwinds.” Cryptocurrency, according to Matt Maley, an equity strategist, probably has a lot more to overcome to really recover and go beyond its former glorious heights. Maley said:
On a technical basis, it’s getting overbought and more importantly for political reasons I think there are just too ma[n]y political headwinds for a cryptocurrency to get the kind of traction the bulls think it will.
In short, bulls believe in fairy tales, while the reality shows that crypto struggles, even in the best of times.
One thing that crypto doesn’t lack on is volatility. Bitcoin, the flagship cryptocurrency, was down around $80 at press time. It will have recovered and lost it again. Imagine a stock performing the same way: people would go mad.
Still, just as Maley points out, some are predicting massive new gains this year:
History tells us that a weekly close above the 0.65 fibonacci will send BTC into a new parabolic bull run.
The 0.236 fib has often acted as a bottom and the 4.23 fib has been exceeded each time.
This means a weekly close above $14,200 would see BTC reach over $75,000. pic.twitter.com/gBmUxx3nE7
— NebraskanGooner? (@nebraskangooner) January 20, 2020
One factor that drives these predictions is the upcoming halving of Bitcoin’s new coins. Essentially, the inflation of the cryptocurrency will drop in half. To make the same money, assuming they get the same number of blocks, miners will have to double the price they ask.
The question, of course, is whether the markets will support as much. At this point, there’s no reason to suspect that’s the case, but some chart analysts do believe that things could go parabolic for Bitcoin, shooting the price to new heights.
Breaking the green line will be what triggers the next parabolic movement that will take us to $100K minimum.
Save this picture.
— Galaxy (@galaxyBTC) January 15, 2020
What would the world look like with $100,000 BTC? Would the price of other assets, like Bitcoin Cash, inevitably follow suit, or would it languish down in the $1,000 range?
If these predictors have their way, we’ll know soon enough.
Bitcoin has so far struggled to recapture $10,000, let alone $20,000. People who bought in at the top and haven’t sold yet have now effectively waited two years, and while there are strong chart predictions that show Bitcoin recapturing these former highs by a long shot, these people could be waiting a long time yet.
The Bitcoin price has recently withstood some massive sell orders on the part of a few whales. One factor that’s increasingly coming into play, as noted above in the article, is politics, especially in places like China.
China, of course, aims to launch its own digital currency, rather than use something like Bitcoin.
The prospects of Bitcoin actually displacing a national currency, at this point, seem muted.
All the same, it wouldn’t be too much to expect a return to over $10k after the halving, as at least some miners would be raising the cost of their new coins coming to market. The market would likely be willing to pay a higher price. How much higher is the question that has yet to be answered.