Bitcoin ends another week on another long-term high after a frenzied few days’ trading delighted bulls and saw no sign of a major pullback.
A transformative week for traders, Bitcoin has reached highs not seen since immediately after it peaked at $20,000 in late 2017.
Modern Consensus takes a look back at recent events and considers what the next few days may have in store for the Bitcoin price. We also publish a weekly outlook every Monday, the latest edition of which you can find here.
BTC shows its staying power at $18,000
Bitcoin started out on a strong footing on Monday, reclaiming $16,000 and swiftly moving higher in step with stock markets. The US dollar was showing signs of strain, as the US dollar currency index (DXY) fell to cancel out its previous gains.
This set the scene for buoying already positive analysts, with institutional buying supported by fresh bullish price predictions from unlikely sources, such as banking giant Citibank.
Tuesday continued the mood, as BTC/USD rose to pass $17,000 and also pass a significant level against gold — 9 ounces of the precious metal per coin.
At the same time, attention was being drawn to the relative lack of mainstream interest in Bitcoin’s performance compared to 2017. One strategist even told Bloomberg that “fascination” among investors for Bitcoin had died.
Price performance showed an entirely different story, however, as on Wednesday, Bitcoin reached $18,000 for the first time since early January 2018. Despite concerns that a major correction was imminent, in the event, markets “only” briefly dived to $17,400 before rebounding.
Extant corporate buyer Michael Saylor, CEO of MicroStrategy, said that shorting Bitcoin was thus a highly dangerous game as his $425 million investment from August and September saw 60% gains.
Thursday saw a continuation of the ranging behavior above $17,000 after BTC/USD topped out at $18,420. Record daily closes fell one by one, cementing this week as a historic event in Bitcoin’s history.
Ethereum returns to $500
Friday has delivered fresh surprising performance for Bitcoin, which so far has risen back above $18,000 and rehit its $18,420 highs from earlier.
Excitement among well-known proponents likewise showed no sign of abating, personified by Saylor, who highlighted a report from Deutsche Bank which revealed that institutions had begun preferring Bitcoin to gold.
“For thousands of years, we crossed oceans in wooden ships & stored value in golden coins,” he tweeted.
“With the invention of steel, wooden ships became ornamental yachts. With the invention of #Bitcoin, golden coins will become ornamental jewelry.”
Gold has failed to capitalize on the safe haven appetite among large-volume investors, but within cryptocurrency, Bitcoin has started to see some competition. Altcoins are showing signs of bullish momentum, with Ethereum hitting $500 for the first time since June 2018.
Out of the top ten cryptocurrencies by market cap, Ethereum challenger Polkadot has delivered the best daily gains of 16%, with Litecoin on 11%.
With the majority of altcoins still far below their all-time highs from three years ago, however, the overall cryptocurrency market cap is thus still far from beating its historical record of $800 million.
“Altcoins are popping…. you know what’s next,” trader Josh Rager told Twitter followers on Friday.
“…While I value Bitcoin’s fundamentals, there are many times where altcoins provide far more profitable returns.”
Van de Poppe likewise felt that an incoming major market turnaround would soon hit.
“The next altseason is going to be absolutely ridiculous,” he added.
All eyes on $20,000
Looking ahead, traders will be keenly eyeing Bitcoin’s ability to flip current levels to firmer support, while altcoins begin to demonstrate their real strength.
$20,000 still looms large, and opinions are mixed as to what might happen should BTC/USD rise higher to challenge that level.
For Mike McGlone, chief strategist at Bloomberg Intelligence, a selling point may well end up characterizing the end of the uprend.
“Short term, $20,000’s pretty good resistance,” he told Bloomberg TV.
“I’m afraid it’s probably going to do what gold did—it got to $2,000 and then it’s been consolidating in a bull market since.”
He added that while this year the price of Bitcoin has added a 1 to the beginning of its price, the future would add an extra 0 the end.
Past performance, he said, could perfectly well be “indicative of the future.”