Bitcoin Analysis for 19/01/2021
During the weekend, the price of bitcoin had a significant decline of almost 16%. Yesterday, BTC/USD touched its lowest point, just under $34,000, according to CoinGecko.
Today, BTC/USD has moved back above $35,990, according to CoinGecko.
Unlike the prediction we made Friday, the price of bitcoin reversed its bullish trend and started to consolidate between $30,000 and $37,000. Yesterday we wrote that we expected the price of bitcoin to keep trading above $35,000 and that’s precisely what has happened; hence, we would not worry too much about a continuation of the downtrend trend for much longer. Additionally, we notice how BTC/USD is finding a significant number of buyers above $34,000, an extremely bullish sign.
There have been some recent developments that could be fostering the adoption of bitcoin worldwide. Not only are companies entering the space, like MicroStrategy, but banks such as Goldman Sachs are now looking to make advancements as well. As reported by CoinDesk’s Ian Allison:
“the major investment bank has issued a request for information to explore digital asset custody, though it is not interested in becoming a prime broker. Last week crypto-native Anchorage attained conditional approval from the Office of the Comptroller of the Currency to become a national digital bank.”
To conclude our introduction, just like we wrote yesterday, we think that once the price of bitcoin surpasses $40,000, more buyers will enter the space. We don’t expect sellers to remain in control for much longer, hence take these opportunities to accumulate additional bitcoin.
For now, we think BTC/USD might have a few bounces between $35,000 and $40,000. Once the price of bitcoin breaks out of the consolidation zone, we should see a massive uprise towards $50,000.
As a reminder, we are confident BTC/USD will continue to move upward if:
- BTC/USD remains above its 20-day EMA (red), 50-day EMA (green) and 200-day EMA (blue).
- BTC/USD doesn’t drop below $35,000.
- BTC/USD daily volume goes back above its 21-day Moving Average.
What Do Traders Think?
The first tweet thread of the day comes from Sergej Kotliar, CEO of Bitrefill, a cryptocurrency only e-commerce website to purchase gift cards and refill phones with bitcoin.
In the post, Kotliar shares the chart of the number of bitcoin payments per day, writing:
“Bitcoin payments per day hit an all-time-high* in the past weeks, higher than the peak of the previous bull run.”
This is a super important metric since it shows that the number of bitcoin payments is definitely increasing, which proves more people are transacting bitcoin today than in 2017.
But wait, there’s more.
In a follow-up tweet, he shares a chart of the bitcoin mempool size in MB. According to Blockchain.com
“The mempool is where all the valid transactions wait to be confirmed by the Bitcoin network.”
What’s quite impressive is the fact that the mempool is at such low values today. In 2017 it was breaking record highs, in terms of the number of transactions waiting to be confirmed.
If we put together both tweets, we notice the following: the number of bitcoin payments is increasing and breaking records, however, the number of transactions waiting to be confirmed is close to its lowest point, unlike in late 2017.
Therefore, we conclude that the bitcoin network is enjoying significant improvements in terms of transaction processing.
The next update comes from CryptoBirb, a well-known trader and a Certified Technical Analyst.
In his post, CryptoBirb shares a 4-hour price chart of BTC/USD. He adds two trendlines, one at the top and one at the bottom, much like we did yesterday in the Bitcoin Price Prediction section.
CryptoBirb believes bitcoin is currently stuck at a range between $35,400 and $36,800. As we wrote yesterday, it seems the cryptocurrency wants to remain within this range until the end of January. Perhaps before the end of the month, we might see some price action to the upside.
We think $40,000 is the next target and that soon after, bitcoin will reach $50,000. Therefore, in less than 30 days, we could be witnessing a brand new all-time high.
However, as CryptoBirb shows, the market could turn back around and move downwards, in which case we could see bitcoin moving closer to $30,000, perhaps to even lower targets between $22,000 and $27,000.
The trader also shared the daily chart of bitcoin containing these targets. He added the 21-day EMA, or Exponential Moving Average, and underlined how BTC/USD has been able to trade above since October.
Roger also wrote that:
“Bitcoin is currently compressing and expect upcoming volatility.”
As long as the magnitude of the buy orders is greater than the magnitude of the sell orders, we think the market will move up and, as we previously wrote, bitcoin will soon be close to its previous high, above $42,000.
The last tweet of the day comes from Madelon Vos, whose Twitter profile describes her as an investor and technical analyst.
In her post, she shares a chart of the 30-minute price of bitcoin, adding a few trendlines and a blue area showing the next target top, close to $40,000.
She also writes how she expects the week to be “awesome.” Why? Because she thinks the price will move to higher price levels.
We agree with the analysis, and we’re also of the opinion the price of bitcoin will break the consolidation triangle to the upside.
Bitcoin Price Prediction
During the weekend, bitcoin had a significant fallback of more than 15%, according to CoinGecko. Since Friday, the price of bitcoin started a new downtrend and is currently trading below $40,000, around $36,000.
Since the drop, the price has stabilized and is now consolidating between $35,000 and $40,000.
Adding to the above, we don’t see a reason why bitcoin couldn’t go above $50,000 by the end of this month. We think once the price trend reverses, hordes of new buyers will enter the space.
Today we discussed how most traders see the price moving in the short-term. Most think once the consolidation period ends, there will be a significant move, that could either go to the upside or downside. We also dove deep into some of the differences between the current bull run and the 2017 bull run. It seems that although the number of transactions is breaking record highs, the number of transactions waiting to be processed remains quite low.
How do we think the price will trade today? As shown in the above chart, we think that bitcoin won’t go above $42,000. However, it is unlikely that BTC/USD reaches this price target.
On the other hand, we don’t expect the digital currency to drop much below $34,000 due to the sheer number of buy orders placed above $30,000.
To finalize, the Volume Profile Visible Range (VPVR) shows a high number of buy orders between $31,000 and $37,000, and then again between $27,000 and $29,000, which means BTC/USD should not go below $30,000, even if things deteriorate significantly.
As a reminder, we believe BTC/USD will find a new high near the $50,000 price range sometime in the next fourteen days.
Posted Using LeoFinance Beta