We’re already halfway through the year and while bitcoin has done relatively well – having shot back up into the $9,000 range since March – the currency still has a way to go if it’s going to reach some of the end-of-year predictions that analysts have set for it.
Bitcoin May Not Reach an End-of-Year High
2020 was the year of the highly anticipated third halving, and for many analysts, this was the year in which bitcoin would potentially reach its all-time high again of nearly $20,000. However, while this figure certainly looked achievable early in the year, that number is looking a bit distant when compared with the figures of today.
By the end of March, bitcoin got itself stuck in a massive rut. The coronavirus pandemic that spread form China into Europe, America and other parts of the world caused a serious fall in assets and financial markets everywhere.
Bitcoin, which up to that point had been trading beyond the $10,000 point, saw itself fall into the high $3,000 range by the next month, and while the currency did eventually add about $6,000 to its price, bitcoin has failed twice to hit the $10,000 mark again, causing much doubt amongst analysts that the asset is set for a big rally by the time 2021 is ready to ring in.
The first time the currency hit $10K again was just prior to the halving. This only lasted for a short period and by the time the event took place, the world’s number one digital currency by market cap had fallen again into the low $9,000 range.
The second time was just a few weeks ago in early June. The jump literally lasted only a few hours, and after BTC briefly hit $10,200, the asset saw itself back at $9,500.
It’s unclear if the bitcoin price is about to suffer any further considering many bitcoin options are about to expire. One source is reporting that as much as $930 million in bitcoin options is set to expire by the end of this week. This figure equals roughly 70 percent of the entire open interest surrounding bitcoin.
Chris Thomas – head of digital assets at Swiss Quote Bank – explained in a statement:
The key thing to watch over the next few weeks is the COVID-19 related equities selloff. If markets react very negatively towards the increased coronavirus cases, we may see more panic which could also pull bitcoin lower.
Keeping It for the Long Term
However, blockchain analytics firm Chainalysis believes BTC is likely to be fine considering many of its holders are keeping it as a long-term investment. The company explained:
The data shows that the majority of bitcoin is held by those who treat is as digital gold: an asset to be held for the long term. With more people looking to trade bitcoin… [the asset] moving from the investment bucket into the trading bucket could become a crucial source of liquidity.