Bitcoin
A Flurry of Double Top Snubs Hints Bitcoin Will Hit $21,000
Yashu Gola | Dec 01, 2020 | 09:41
Bitcoin has more fuel to continue its bullish rally.
Independent analytics firm TradingShot wrote that BTC/USD could hit $21,000 in the coming sessions in a note Monday. Its upside bias took cues from a confluence of chart signals that provably assisted Bitcoin in rallying almost twofold in the fourth quarter. The same signals envision the cryptocurrency at $21,000.
The Setup
The bullish setup consists of a widening Rising Wedge, a cyclical Relative Strength Indicator, and a flurry of super-bearish Double Top patterns that do not work as intended. As the chart above shows, Bitcoin is forming the Double Top, awaiting a breakout above it, with a target sitting around the upper Wedge trendline.
Bitcoin “Bullish Megaphone” setup, as presented by TradingShot. Source: BTCUSD on TradingView.com
Meanwhile, the RSI is also showing signs of growth. What’s further acting as a bullish catalyst is a supporting wave at the 4H 200 moving average (the orange one in the chart above).
“So why $21,000 in particular,” explained TradingShot. “This is due to an underlying Fibonacci sequence within the Megaphone. As you see every time BTC touches the Top of the Megaphone, it is roughly on the 1.000 Fibonacci extension from the previous High. And that Fibonacci extension is around $21,000 next.”
Bitcoin Fundamentally Strong
The prospects of Bitcoin hitting yet another all-time high grow higher also because of a supportive macroeconomic environment. The cryptocurrency is experiencing renewed buying interest from retail and institutional investors alike, primarily those seeking alternatives to a bearish US dollar and similar fiat-based markets.
In May, billionaire investor Paul Tudor Jones allocated 1-3 percent of his $22bn-portfolio to Bitcoin Futures. Two months later, MicroStrategy, a Nasdaq-listed software firm, bought $250 million worth of BTC to replace its cash reserves. It invested another $175 million into Bitcoin in October 2020.
The same month saw Square, a global payments firm, revealing about $50 million worth of BTC sitting in its Treasury. Meanwhile, Square’s top rival PayPal integrated Bitcoin-enabled services into its flagship platform, thus bringing the cryptocurrency before its hundreds of millions of users.
Travis Kling, the founder of Ikigai Asset Management, called the growing Bitcoin institutionalization a “Traditional Onslaught,” adding that the cryptocurrency is “just getting started” with sticky money investments.
Bitcoin adoption booms among mainstream firms. Source: Travis Kling
The Winklevoss Twins, who run a cryptocurrency exchange called Gemini in the United States, also noted that Bitcoin’s actual value is about 25 times higher than what it is at present.
“Our thesis is that Bitcoin is gold 2.0 and it will disrupt gold,” said Tyler Winklevoss. “If it does that it has to have a market cap of $9 trillion. So we think bitcoin could price one day at $500,000 a bitcoin. So at $18,000 bitcoin it’s a hold or if you don’t have any its a buy opportunity because we think there’s a 25x from here.”
