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RoboForex lead analyst Dmitry Gurkovsky discusses further possible scenarios for bitcoin price movement.
Earlier today bitcoin updated its historical high above $28,500 once again in the last few weeks. It is believed that the current bullish trend will continue in 2021 – institutional investors have gained full access to this market and continue active buying. Moreover, analysts Crypto Genius are beginning to compare the fundamentals of digital currencies to paper money, which is steadily depreciating in contrast to cryptocurrencies.
A price of $100,000 to $200,000 per bitcoin is already considered a conservative forecast for 2021. However, a correction cannot be ruled out – any trend must breathe before it continues to rise.
The situation around XRP in connection with the SEC lawsuit against Ripple may also have a positive impact on the price of the first cryptocurrency.
XRP’s capitalisation has been falling aggressively, and since reports of the SEC’s action against Ripple surfaced, the asset has fallen in value by more than 50%. It is likely that XRP holders are now selling off their holdings and choosing to invest in bitcoin. Some exchanges have already delisted XRP as it is risky for platforms to support cryptocurrencies that could be considered a security.
In the current situation, when we build upward trend lines, we only get more upward slope of such lines, which means that the trend is gaining strength. The nearest important support now is the level of $25,690, a breakdown of this area may trigger the development of a correction to the levels of $24,000 and $22,000.
Monthly chart of Bitstamp BTC/USD from TradingView.
From a technical point of view the chances for bitcoin growth are quite high. On the monthly chart, the upper boundary of the Triangle pattern has been broken and the target for the pattern is the $50,000 level. Therefore, the digital asset could easily continue its growth as early as 2021.
If we consider the whole current structure as the ascending pattern „1-1“, the growth target may be the level of $150,000-160,000. It is important to understand that this is just a forecast on large timeframes, the working out of which may take a long time with impressive downward corrections.
A 4-hour chart of Bitstamp’s BTC/USD exchange from TradingView.
The 4-hour chart saw a break of the upward horizontal correction as the market moved from the $24,000 level to $28,325. It should not be ruled out that the current move could repeat the previous momentum and show a price at $32,500.
Breaking the lower boundary of the uptrend channel may be a signal for correction development, which will indicate slowing of the bullish trend and development of correction to the level of $24,000. It is worth paying attention to the behavior of the RSI indicator, which has not fallen below 30 since the breakdown of $20,000. Investors simply do not allow a strong correction in the asset, but continue to buy at the slightest decrease.