Bitcoin has hit new all-time highs of $44,000 as it begins a new week after Tesla confirmed that it had custodied $1.5 billion worth of BTC.
After a promising week’s trading, BTC/USD rose above the upper limit of its $10,000 trading corridor on Saturday before correcting, with $40,000 support still out of reach. A sudden move from Tesla then changed the atmosphere entirely. What’s next?
Modern Consensus takes a look at where Bitcoin may go in the coming days. We also publish a weekly recap every Friday, the latest edition of which you can find here.
Bitcoin battles for $40,000 support after new record high
Bitcoin finally saw a fairly eventful weekend with movement to the upside beginning February 5.
Bullish sentiment was returning as Elon Musk added to a heavily oversubscribed corporate adoption conference from MicroStrategy, attended by over 6,000 companies. As the event progressed, buy-ins were seen on major exchanges, with support fuelling Bitcoin’s surge to just below $41,000.
While not retaking an all-time high, the push highlighted increasing motivation to break established trading behavior. This has revolved around a trading corridor with $30,000 as its floor, something which less than a week ago was seeing regular tests.
A decisive move outside of this corridor would signal the next phase for Bitcoin price action, but early Monday morning, that move had yet to come. The mood was optimistic in the short-term, but very cautiously so. Popular trader Michaël van de Poppe said in his latest YouTube update on Monday:
“So we have this resistance zone at $40,500 which is preventing the markets going to $50,000 and to new all-time highs, and on the other hand, we have $38,000 which is currently acting as support and preventing the markets from correcting heavily.”
He warned that should support give way, not only would Bitcoin return to around $34,500, but the entire cryptocurrency market would follow in correcting. The likelihood of a correction at the current range highs, he said, is “significant.”
“Big question here, will Bitcoin go range-bound here like it did back in 2019’s run-up, with the only hope for more upside instead of breaking down this time,” fellow trader Josh Rager added.
Then, news that Tesla had bought Bitcoin upended the short-term perspective as Bitcoin abandoned its corridor and hit $45,000.
ETH, DOGE strong, too
At press time, the impact of the move was still being felt amid heavy volatility.
At the start of the week, however, Ethereum is also a topic of conversation. Monday marks the debut of CME Group’s dedicated ETH futures, with all-time highs on ETH/USD preceding a highly-anticipated step forward for the largest altcoin.
At press time, the pair circled $1,665, with Van de Poppe explaining that $1,690 was a crucial area to break in order to continue the uptrend. Fail to do so and numbers closer to $1,300 could follow.
“If we hold that $1,500 level, we might be continuing towards $2,000 but at this point, it’s just too vertical to me,” he said about higher timeframe performance.
The day’s big mover once again, however, was Dogecoin. Thanks to a now familiar endorsement from Musk, the meme-based altcoin put in 24-hour gains of 25% to climb above $0.075.
“Doge appears to be inflationary, but is not meaningfully so (fixed # of coins per unit time), whereas BTC is arguably deflationary to a fault. Transaction speed of Doge should ideally be a few orders of magnitude faster,” he claimed on Monday.
Not everyone was convinced. Saifedean Ammous, author of the popular book, ‘The Bitcoin Standard,’ accused Musk of deliberate misinformation.
“Wow such genius humor!! Incredible intelligence is needed to appreciate the genius of promoting a scam to 40 million followers,” he retorted on Twitter.
Stevens on adoption: “I have an orderbook. I’m not guessing”
Meanwhile, the dust is settling on what is arguably one of the most bullish indicators of definitive Bitcoin adoption already happening.
MicroStrategy’s various discussions as part of the ‘Bitcoin for Corporations’ segment of its World Now conference provided plenty of ear candy, but one in particular stood out. Ross Stevens, founder of asset manager Stone Ridge and Bitcoin offshoot NYDIG, captured the imagination of Bitcoiners simply by sharing predictions based on his companies’ genuine order book.
“@NYDIG is a full-service, vertically-integrated, bitcoin-only financial services firm. The first billion [dollars] took 1200 days to raise. The last billion took 6,” he told MicroStrategy CEO Michael Saylor.
“A year ago, we had 25 institutional clients. Today, we have 280.”
Stevens also revealed that based on interest his firm is seeing, the coming year will be a turning point for institutional Bitcoin participation.
“By the end of the year, I am confident we will have over 25 billion dollars of bitcoin. I have an orderbook, I’m not guessing,” he added.
“Exactly zero clients have walked back their allocation. Once people get off zero, they either stand pat or they increase.”
Stevens likewise took the opportunity to berate financial giants with a critical appraisal of Bitcoin, those including Warren Buffett, Jamie Dimon and Larry Fink. He and other guest speakers were watched by what Saylor said were more than 8,000 attendees from over 6,000 firms.
Feb. 2, 2021 at 10:20 a.m.: updated bitcoin all time high.