Bitcoin is finishing another week on a high—one that could turn out to be its best or second best on record.
After clearing $50,000, the largest cryptocurrency continues to battle the final hurdle before its all-time highs of $58,300.
Modern Consensus recaps the week’s events and considers what might lie in store in the coming days for Bitcoin traders. We also publish a weekly markets forecast every Monday, the latest edition of which you may find here.
A week of “almost” for Bitcoin
The past week’s trading has been one big guessing game for hodlers as Bitcoin edges ever closer to all-time highs—but avoids hitting them.
Monday began with an assault on $50,000 resistance, something which ultimately proved successful as higher levels rapidly came into view. $52,000 then became a level to watch for essential support convergence, this ultimately holding with BTC/USD staying higher.
Despite the progress, however, a distinct inability to quash final resistance below all-time highs meant that the pair essentially stayed rangebound throughout the past five days.
Rumors that Oracle was about to announce a giant 72,000 BTC buy-in looked set to obliterate the trading channel once and for all, but a let-down instead brought a solid reinforcement of the current range.
With a rebound nonetheless taking Bitcoin back to $58,000, albeit briefly, appetite is clearly visible for further retests. As ever with cryptocurrency, however, nothing is remotely guaranteed.
“…The bulls are expecting the price to reach $60K anytime soon. Along with the US Congress passing the Covid-19 aid bill, more funds would inflow into the Bitcoin market as expected,” cryptocurrency exchange BTCC summarized in a note on March 12.
“Therefore, Bitcoin’s bull run remains strong.”
Opinions begin to diverge on bullish prospects
On Friday, however, overall direction was undecided for BTC/USD, the market giving little hint about what could happen next.
“Bitcoin faces the resistance zone here, still. If it doesn’t break further upwards, I’m looking at $53K and $55K as potential levels of support to hold on to,” popular trader Michaël van de Poppe wrote in a fresh Twitter update.
Van de Poppe had previously eyed the significance of $52,000 as an essential level hold, with a slow inching up of support highlighting the steady upward shift in sentiment through the past week.
Fellow trader Crypto Ed was less bullish, arguing that only a surprise shift in the paradigm would halt what could otherwise be a retest of all-time highs followed by a sell-off and retracement.
“I’m a bit less enthusiastic as I was yesterday… Something feels ‘off.’” he told Twitter followers on the day.
“We could be forming an ‘ending diagonal’ here, followed by another leg down over the weekend… Take out previous ATH and go down to retest previous break out.”
That would see $50,000 take center stage once again, and also Bitcoin’s market cap resistance at $1 trillion, equal to a BTC/USD value of around $53,600.
Crypto Ed nonetheless did not dismiss the likelihood of a “monster” candle taking Bitcoin past all-time highs in a manner similar to that in which other significant price barriers—notably $20,000—fell over the past year.
Enter stimulus check No. 3
The trigger for such an impulse wave could come from a familiar source—retail investors’ fear of missing out (“FOMO”).
Next week is slated to see the start of distribution of the latest round of coronavirus stimulus checks. This time worth $1,400 a piece, recipients may well choose to allocate their funds to an investment rather than instantly spend them.
Bitcoiners are hoping that given the cryptocurrency’s heightened publicity this year, even more stimulus check cash will flow into the ecosystem than during previous handouts in 2020.
The investment proposition, they say, even at near all-time highs, remains solid. Discussing return on investment potential, quant analyst PlanB underscored Bitcoin’s unique position within macro investment assets.
“Key thing is not bitcoin’s high risk/volatility, but that return is higher than risk, the asymmetry,” he tweeted this week.
“Even if you only invest 5% of your portfolio (and thus can only max lose 5%), average portfolio return is +20%. BTC is the only asset I know with this large asymmetry.”
An accompanying chart detailed how compared to other macro opportunities, Bitcoin either outperforms or implies less risk to the holder.
