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Bitcoin price hits USD 16,000….What’s next?

In a highly anticipated moment, Bitcoin managed to hit an all-time high price ever since 2017 of USD 16,000 on some exchanges. People from all over the world are starting to notice the rising market of cryptocurrencies, and a flashback of a strong FOMO is pushing people to buy even more, driving the price further up. Even the giant JP Morgan is growing an interest in investing in Bitcoin rather than Gold. Where will the price go this time?

Bitcoin Price Analysis – A strong momentum

In our previous article, we analyzed the price-action of Bitcoin, predicting a move towards Area #4, or a price of USD 16,000. This comes with a highly volatile legacy market, specifically the S&P 500 index, trying to break through its own all-time high price of USD 3,660 (fig.1). Ever since July 2020, legacy markets were on a sideways trajectory, awaiting the results of the US presidential elections. With Biden declared as the projected winner, and Trump trying his best to stay in office for 4 more years, legacy markets did not react fully with a decided trajectory.

The S&P for example is up about 9.5% since the beginning of 2020. On the other hand, Bitcoin is up 120.5% since the beginning of 2020, up 18.5% this month, up 10% this week, and up 3% in 24 hours.

 

SPX500 1 day prices in 2020
Fig.1 SPX500 1 day prices in 2020 – TradingView.com

Is Bitcoin overpriced?

This typical question has been asked for years now, and the real value of Bitcoin predicted by most investors is nowhere near the current price. In fact, legendary investor Bill Miller says that this is the right time to buy Bitcoin as the fundamentals are getting stronger every day.

Where is the price of Bitcoin heading?

After breaking the USD 16,000 price level, Bitcoin is on its trajectory to reach its all-time high price of 20,000 once again. The technicals and the fundamentals are all there. Traders are entering the markets determined to reap the rewards of a price explosion, but this time with a strict risk management mindset, fearing a 2017 like price crash.

  • Stop Loss levels to consider :
    • USD 15,000
    • USD 14,000
    • USD 12,000

The above levels are mainly psychological areas set by market price-actions, just in case the market fails to keep its strong momentum, though this is not looking to be the case so far, with Bitcoin breaking through its USD 16,000 price level (fig.2)

BTC/USD 1 Hour chart - BTC breaking the USD 16,000 level

Fig.2 BTC/USD 1 Hour chart – BTC breaking the USD 16,000 level – TradingView.com

What’s happening to the whole Cryptocurrency market

In the last 7 days, and contrary to legacy markets which have been on a sideways price-action, the whole cryptocurrency market is up:

  1. Bitcoin (BTC) : + 10.52%
  2. Ether (ETH) : + 16.0%
  3. Tether (USDT) : 0%
  4. Ripple (XRP) : + 7.54%
  5. Chainlink (LINK) : + 24.38% (surpassing Bitcoin Cash by Market Cap)
  6. Bitcoin Cash (BCH) : + 5.50%
  7. Binance Coin (BNB) : + 2.79%
  8. Litecoin (LTC) : + 7.75%
  9. Polkadot (DOT) : + 8.62%
  10. Cardano (ADA) : + 12.58%

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