Bitcoin has seen an extremely strong rally over the past few weeks, which has surprised most investors.
Even after yesterday’s decline towards $28,000, BTC has gained 75 percent in the last 30 days and over 100 percent in the last six weeks.
The rally has stunned even the most ardent Immediate Edge supporters as many doubted the cryptocurrency would reach $20,000 by 2020. But here we are, just days after 2021 began, at over $31,000.
While consolidation has begun, some fear the market will correct downward.
Bitcoin could soon see a correction, according to Novogratz
According to Michael Novogratz, the CEO of Galaxy Digital and a former partner at Goldman Sachs, BTC could soon be poised for a pullback.
He told CNBC in a recent interview that the cryptocurrency is likely “vulnerable” to pullbacks. The cryptocurrency is extremely overbought following many technical trends, according to other analysts. Bitcoin has also regularly fallen in previous bull markets to retest key support levels before moving to new all-time highs.
In the last month, BTC has yet to do so. However, he still foresees long-term growth in bitcoin because he sees so much institutional capital flowing into it. Novogratz said he “can’t hire people fast enough” to service the institutions Galaxy works with.
To prove his point, SkyBridge Capital just announced it has a $300 million bitcoin position:
“SkyBridge Capital, a leading global alternative investment firm, today announced the launch of SkyBridge Bitcoin Fund LP, which provides high-net-worth investors with an institutional vehicle to invest in Bitcoin. In addition, SkyBridge has initiated a position in funds investing in Bitcoin in November and December 2020 on behalf of its flagship funds, valued at approximately $310 million as of this writing.”
Long-term trends remain bullish
Analysts are certain that the long-term trends for the bitcoin market remain bullish. Andrew Kang of Mechanism Capital recently stated that the introduction of large institutional players into the bitcoin space will likely drive the market far higher than we can imagine in this cycle:
“Guggenheim, Scaramucci, Saylor, etc. They will pour their hearts out with 1000 times the influence any of us would hope or think possible. They will be wielding immense pockets of capital that we thought #BTC would never touch. For that reason, I think this cycle will go further than many of us would expect”
Not the only bitcoin bull
Novogratz isn’t the only one who thinks bitcoin will hit new highs in 2021. Yesterday, it was revealed that the U.S. will continue to print money excessively.
Many institutions have bought bitcoin in 2020 to hedge against such a scenario. The pseudonymous analyst recently shared a chart that puts the 2013 and 2017 bull runs in relation to today’s prices.
In the tweet below, you can see three different price trajectories. Dark blue for the 2012 trend, light blue for the 2016 trend, and red for the Bitcoin price trend in each case after the halvening event.
What is amazing here is that BTC rises almost like clockwork after the halving event and is currently in between these runs. If Bitcoin follows the percentage run of 2017, then the price could reach heights of beyond $100,000, while a level of over $800,000 at the peak is possible if the trend is similar to 2013.
So far, the popular cryptocurrency has been hovering between the two charts and it makes it seem that the next few months could be more bullish than anyone currently imagines.
PlanB points out that if history repeats itself, Bitcoin could take the $100,000 mark in 3 to 8 months.