Bitcoin has now managed to cross the $20,000 mark and stay quite comfortably above it as it pushes between $22,000 and 24,000. The new week, and the lead up to Christmas could be an interesting week though as there are a number of external reasons the coin could go higher, but some analysts are predicting a dip below $20,000.
In the US, congress has agreed on a near trillion coronavirus stimulus bill which will see Americans receiving a cash injection of $600. While this may seem unrelated to Bitcoin, there was evidence that the last stimulus cheque was spent on Bitcoin for a number of people.
Additionally, this is another monetary policy that sees money being printed out of thin air and thus pushing further concerns about US Dollar inflation — a known Bitcoin booster.
Yet, despite all this some analysts are looking at futures gaps which indicate Bitcoin could fall as low as $19,500 in the next week, according to technical analysis.
A lot has happened to Bitcoin in the past few weeks, and the run up to the end of the year still has a number of factors that could impact the price — from Elon Musk Tweets to the Fed allowing banks to buy back their own stock.
Stimulus a boost for Bitcoin?
On the announcement of the stimulus bill, there was a small boost for the US Dollar which will be against Bitcoin, but if there is another concerted effort to buy Bitcoin with stimulus checks, things could be positive for the digital currency. More so, the money printing concerns in the US continue to loom.
“Brrrrrrrr another $1 Trillion to be printed by the Fed,” James Todaro, a popular commentator on Bitcoin and coronavirus-related topics on social media, said.
“Bitcoin was created for this exact reason during the Financial Crisis of 2008. Is it really surprising that #Bitcoin is making new all time highs?”
Brrrrrrrr another $1 Trillion to be printed by the Fed.
Bitcoin was created for this exact reason during the Financial Crisis of 2008.
— James Todaro, MD (@JamesTodaroMD) December 21, 2020
Additionally, Cointelegraph Markets analyst Michaël van de Poppe highlighted the longer-term impact of adding more debt to the US’ tally through financing the stimulus bill.
“Agreement on the $900 billion coronavirus relief bill. Another step towards weakening the U.S. Dollar,” he wrote. “This printing won’t end well at all, as historically, it never does. It’s just extending and trying to continue our failing financial system. Adopt. Buy Bitcoin.”
Closing the gaps
Despite all this, there are technical indicators pointing towards a dip in the price of Bitcoin this week.
Van de Poppe said in his technical analysis various lows from earlier in the month and before which need to be liquidated. Specifically, these involve CME Group Bitcoin futures gaps, two of which are over $1,000 in size and remain unfilled, leaving the potential for a wick as low as $16,900.
“Lower timeframe, we’ve got some critical things we have to watch,” he said. “We did see a higher high, a new all-time high yesterday. However, less volume on the whole for potential bearish divergence.”