Bitcoin is just inches away from all-time highs as this week closes—what’s the mood among traders going into the weekend?
At just below $60,000, BTC/USD is causing plenty of excitement in the week that it gained acceptance from one of the world’s biggest banks.
With upside momentum still lacking, however, hodlers are demanding to know what lies in store and how much fuel is left in the current bull run.
Modern Consensus takes a look back at the events of the past few days and considers what might be next for Bitcoin. We also publish a weekly forecast every Monday, the latest edition of which you may find here.
Bitcoin and institutions: “Nothing will ever be the same”
The week began with price action of the kind feared by leveraged long traders everywhere—sudden intense volatility to the downside.
After hitting all-time highs of $61,700 on Sunday, BTC/USD began retracing, this accelerating as macro markets opened to provide a record $6,000 drop in a matter of hours.
Later, local lows of just above $53,000 signalled the floor which has since held, equating to a roughly 14% drop versus the highs. This is not, in fact, a particularly severe retracement for Bitcoin, as even its comedown from the previous record at $58,300 induced a steeper correction percentage-wise.
Nonetheless, it was music to the ears of critics, who as ever seized on the volatility as proof that Bitcoin is unsuited to be a store of value for either individuals or institutions. Among them was Bank of America, whose researchers claimed that owning a $60,000 bitcoin is like owning 60,000 cars.
“Yes, it’s pure speculation,” gold bug Peter Schiff responded to the findings. “The ultimate bubble.”
Charts however told a different story, as buyer support came in well above $50,000 to both mute the price dip and resend BTC/USD to near $60,000 as the week progressed.
Hodlers’ cause was helped by fellow U.S. bank Morgan Stanley, reported to be less than one month away from providing wealthy clients with access to three Bitcoin funds. This is, as Modern Consensus reported, the first such move from the legacy banking sector.
“Morgan Stanley’s announcement to offer bitcoin to their clients ($5T) in April ushers in a new era,” Eric Weiss, CEO of Bitcoin Investment Group, concluded.
“A tidal wave of money is about to flow into bitcoin. Every major bank will follow. Nothing will ever be the same.”
Will $100,000 end the bull run?
With bullish events cementing the mood, attention is now focusing on a “not ‘if,’ but ‘when’” scenario for further Bitcoin price increases.
In a summary analysis, analysts at trading tool Decentrader highlighted the 20-week moving average (MA) as a reliable foundation, with upside potential eyeing a $100,000 ceiling.
“Given current price action and the rate at which the 20 WMA [weighted moving average] is catching up $43k is likely to be a reasonable floor price in the short term, with… on-chain buying being seen around those prices as we have previously mentioned,” they wrote in a blog post.
“The upper boundary on the chart is at around $100k which may be indicative of a top if we accelerate in the short term.”
Decentrader also argued that last weekend’s push to all-time highs was in part facilitated by the release of stimulus checks, recipients of which were immediately converting their $1,400 value to BTC.
“So to summarise, Bitcoin continues to show strength, with $56k acting as support being a pivot point,” the analysts added.
“$70k is the upside target which we have been looking towards for some weeks.”
Decentrader analyst filbfilb previously described the $70,000 level as “destiny” for Bitcoin, while quant analyst PlanB this week said he believed BTC/USD would not stop at even $100,000 this cycle.
In the meantime, traders are being advised to be patient as prices continue to track sideways.
“The price of Bitcoin is exactly the same as it was 24 hours ago. Don’t get chopped up trading when there’s nothing happening,” Scott Melker summarized on Friday.
At the time of writing, Bitcoin is back above its $58,300 high, having seen 24-hour lows of $56,370.
Major altcoins are also correspondingly flat, with the top ten cryptocurrencies by market cap seeing hardly any movement overnight. The exception is Cardano, which has shed 13% after hitting new all-time highs of its own.