Bitcoin price is rising. Optimists declared a new high on November 30th. More cautious analysts pointed out that a new All-Time High would need to exceed 20,000 USD on various trading platforms.
With this Bitcoin price, the interest in the mother of all cryptocurrencies has also increased. And crypto experts are bombarded with questions like: “Is it already too late to get on board? Will the price drop again? Should I get in now or later?”
Of course, we will answer all these questions. But a little bit later. First of all, when it comes to Bitcoin price prediction then it’s never a good idea just to guess. Price predictions on the wheel of fortune are though.
Analyzing the Bitcoin price technically makes much more sense. Cryptocurrency analysts like Marcel Isler, CEO & Founder of iMi Blockchain, prefer to rely on data and facts. After all, we want to earn money and not lose it.
Therefore, we will show you our current analysis of Bitcoin price compared to the US dollar. Are you ready for a new ATH (all-time high)? Because 40,000 is a conservative estimate and we explain to you why. So continue reading.
- 1. BITCOIN PRICE TODAY
- 2. BITCOIN PRICE PREDICTION
- 3. WHAT WILL BITCOIN BE WORTH IN 2021?
- 4. FAQ ABOUT BITCOIN PRICE
BITCOIN PRICE TODAY
The Bitcoin price today is hovering around 19,000 USD. As always, the fluctuations are enormous. The year 2020 will go down in history. What a crazy year. The corona pandemic and the prices for cryptocurrencies kept us busy. First, let’s take a quick look back at the prices for Bitcoin in our annual review.
January 1st, 2020 the Bitcoin remained stable around 7,180 USD. It went up a bit and dropped on March 17th below 5,000. Many critics have already spoken of the downfall. While professional investors have only been waiting for the next big leap. We didn’t have to wait long.
November 5th, 2020 we saw 14,390 USD on some exchanges and the rally just started. Because only 20 days later the Bitcoin price reached 19,374 USD. Now don’t be surprised, but the next drop came just one day later. At 16,490 some people thought the rally was over. They thought wrong. Because on December 1, 2020, the Bitcoin price climbed back to 19,768 USD.
The search queries for “Bitcoin” on Google trends reflect the increased interest over the past 90 days:
Is Bitcoin a Good Investment?
Bitcoin is a great investment for a number of reasons. The question that you always have to ask yourself first is: “Can I afford an investment at all?”
Investing in Bitcoin is the same as investing in stocks, equity funds, or any other cryptocurrency. If you can afford to park your investment for a long time, then go for it. If you have a long-term investment strategy, then Bitcoin is most definitely a good choice. But if you are already short of cash and you will need your money again shortly, then stay away from it. Day trading is absolutely nothing for beginners.
Now, owning Bitcoin doesn’t make a trading specialist. The minority who invested in Bitcoin early is a mix of fortune-tellers, technology-savvy lovers, and liberals critical of central banks. They are emotionally connected to Bitcoin – they argue accordingly. Therefore, a serious investor will buy Bitcoin when the price is right (not low) and only sell the price gain (profit taking), to keep the invested capital flowing.
This is how you can harvest the ripe fruit and stay cool when the Bitcoin price falls again.
BITCOIN PRICE PREDICTION
As we’ve said before, no one is able to tell you how much Bitcoin will be worth in the future. Bitcoin price prediction is tough. At least short-term value predictions. But an expert with many years of experience would never just guess. Trading knowledge and technical tools can help to make a reliable price prediction. Especially in the long-term.
So what does a sober price analysis look like? Free of emotions and hopeful promises? This is where technical price analysis come into use.
Technical Bitcoin Price Prediction
Marcel gives us a detailed answer to the questions mentioned before. He is a crypto expert for a decade. In the first step, we look at the Relative Rotation Graphs (RRG), developed by Julius de Dempanaer. RRG diagrams make it possible to analyze trends of various securities in a single graphic. They provide the “big picture in a chart”, so to say. We try to make this analysis as beginner-friendly as possible. And we think Marcel did it very well.
When will Bitcoin be worth 40,000 USD?
Let’s explain Marcel’s technical price prediction in detail. Bitcoin and, in a broader sense, cryptocurrencies are once again on everyone’s lips in the financial markets. Lots of individuals and institutional investors are entering the crypto industry. They are all looking to get a piece of the Bitcoin pie.
What can we learn from the Bitcoin diagram if we want to get an idea of future price values?
The first thing to realize is that the rate of Bitcoin or any other cryptocurrency can be compared to any other fiat currency rate. Just as there is no (uniform) price for the USD, there is also no uniform price for Bitcoin. Currencies are always expressed in a “different currency”. For example, the US dollar can be expressed against the euro, Japanese yen, British pound, etc… and a different price will apply to each of them. Bitcoin can also be expressed in USD, EUR, JPY, etc… but also in comparison to other cryptocurrencies. This is an important aspect to understand when looking at currencies and Bitcoin in particular.
Over time, the markets find conventions – generally accepted expressions – of how a price is measured. With Bitcoin (BTC), the relationship to the US dollar (USD) has prevailed.
Since there is very little fundamental data available for Bitcoin, pricing is a very pure process of supply and demand. Which is always driven by fear and greed. This makes Bitcoin and the cryptocurrency markets very suitable for technical analysis.
So what can the charts tell us? How we can tell what Bitcoin will be worth in 2021 or beyond? Let’s start by looking at a long-term graph of Bitcoin versus USD. The following graphic shows the historical price development of BTC/USD since the beginning of 2014.
Why is the Bitcoin Price going Up and Down?
Price fluctuations are always outside the charts. Therefore, a log scale is required.
One look at the graphic is enough to see that the price fluctuations are enormous. This is one of the reasons why many new investors are drawn to Bitcoin trading. Copy trading is a better option if you don’t get this point. The returns shoot out of the charts in a very short time. Unfortunately, it goes both ways, up and down. Risk and return still go hand in hand – in the crypto space it is no different.
On the first chart, one could easily think that Bitcoin didn’t move much from 2014 to 2017 and only really picked up speed in early 2017. Do not be fooled. For markets like these with very large price movements over a long period of time, it is often better to use a so-called “log chart”. A log chart contains a logarithmic scale for the vertical price axis. This type of chart will magnify the apparently smaller movements and put things into perspective.
Chart no. 2 shows the same as Chart no. 1. but now using a log chart. It is immediately apparent that the period from 2014 to 2017 was by no means boring. The more than 70% decline from 2014 high to the 2016 lows was followed by a 270% rebound back to the 2014 high. This resistance area around 670 USD lasted a few months before the price broke higher.
That breakthrough was the start of the mega-rally from 2700% or from $670 to $19,900. Earlier highs turn into new resistance in the market. Investors who bought at this level have suffered losses since entering the market. Many of them are now relieved that they can get out without loss. This is how they create an offer. Others recognize the level of resistance and try to take advantage of short selling.
Short sellers are selling stocks without owning them (their pockets are empty). They speculate on being able to buy this stock later at a better price than what they got for it. The difference is profit.
Hence, they expect a decline from the high.
But if this doesn’t happen and a new high is broken due to strong demand. We often see an acceleration in movement. In addition to the stronger demand, the short-sellers are accelerating the price increase. You have to cover your losses. In addition, sellers who no longer have a position are pushing back into the market. The buying frenzy this triggered lasted a year and a half and ended in late 2017 at a high of $19,900. This was followed by a more than 80% drop to the $ 3,200 area. After Bitcoin was on the news almost every day, the newspapers pretty much forgot about Bitcoin.
The sequence of these events was repeated again, albeit a little less spectacularly, in 2019 with an increase of 340%, followed by a further decrease of 70% until 2020.
The Breakthrough of the Bitcoin Price
From its 2020 low of around $4,000, Bitcoin price rose over 400% to current levels. Along the way, the market faced resistance between $12,000 and $14,000. There the market stalled briefly in mid-2019 and again in mid-2020.
Hence, the break above $12,000 triggered a new rally. The next chart shows in greater detail how the market peaked near $14,000 and then peaked around $ 12,000 three times.
As seen on chart no 4, the third 12,000 dollar peak resistance caused the price explosion that we saw in October and November 2020.
And here we are in December. The price is pushing against the historic high of $19,900 and Bitcoin is reappearing on the news.
WHAT WILL BITCOIN BE WORTH IN 2021?
What does this all mean in terms of possible future price movements for BTC/USD? As you understood our technical analysis, then it should be clear what Bitcoin will be worth in 2021 and beyond.
First of all, a market that is pushing against the highest prices ever recorded is not bearish. Rather, it is a (very) bullish property.
bearish from English «Bear»: trend towards price drops; Bullish from English «bull»: Trend towards price gains.
The series of higher lows and highs visible on both the monthly and weekly charts are also hallmarks of a bull market.
As noted above, these areas that formed previous peaks are typically those where the additional supply comes on the market. If the market is able to absorb this supply, followed by more demand and new all-time highs – especially if it’s a nice round number like $ 20,000 – further acceleration is very likely. And we’ve had this experience before!
Setting a course target after such a break is extremely difficult. If we take a look at Bitcoin’s history, a doubling to 40,000 USD is a conservative estimate. If we get one more of those 300-400% moves. We can all do the math right?
Is there a break first or will Bitcoin even drop?
In the $20,000 region, the supply side will definitely be strengthened. That could slow the price increase in the short term. The market may take some time to absorb the additional supply before actually moving higher.
What can be observed again and again in short-term (daily) charts? When a market approaches a long-term resistance area it is a so-called “negative divergence” between the price and the RSI (Relative Strength Index). The RSI is a technical indicator (oscillator). It usually reaches the high and low along with the price. If that doesn’t happen, a divergence occurs.
In the current case, the Bitcoin price has made successively higher highs recently, while the RSI has lower. This is known as negative divergence. It often signals a pause in the rally or an impending decline.
Given the longer-term outlook for Bitcoin, the bull market, and the possibility of an imminent breakout above $20,000, such a setback must be viewed as temporary and as a little breather before jumping up.
Relative Rotation Graph (RRG) of Bitcoin Price
Another, somewhat more unusual way of looking at (cryptocurrency) markets is the Relative Rotation Graph or RRG. In this visualization, several cryptocurrencies are shown in a diagram. The advantage of this presentation is that users can compare the relative positions of all exponents with one another. Since all relationships are relative, you will find that a pattern of rotation forms around the center, in this case, the US dollar, of the chart.
Chart no. 6 shows an RRG for a group of cryptocurrencies against the US dollar. The lines that move in a northeastern direction mean that the corresponding cryptocurrencies tend to improve compared to the dollar. As you can see, Bitcoin ($ BTCUSD) ranks upfront along with Ripple ($ XRP), which is another sign of the strength of cryptocurrencies in general and Bitcoin in particular.
Finally we can say, the future of Bitcoin and cryptocurrencies in general, is very bright.
Are You Ready for the next Bitcoin Price Rally?
It’s pretty clear. As you reached the end of this article and finished reading it all, you might be hot to invest in Bitcoin as well.
The attentive reader has certainly also understood that it doesn’t matter at what time you buy Bitcoin. As long as you pursue a long-term investment strategy, every time is the right one. The sooner the better. Do not wait! Don’t trust Bitcoin prices to fall again. It might be too late. You could miss the next rally again and again if you wait.
Sure, there are several things to think about before you can start. At the very beginning, make sure to talk with an expert. We at iMi Blockchain are always at your disposal. Our experts can show you how to buy, hold, and sell cryptocurrencies. On top, we’re always happy to give you an updated Bitcoin price prediction. Are you ready? Then book a free consultation right now!
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FAQ ABOUT BITCOIN PRICE
Will Bitcoin price drop?
Bitcoin price is everything but not stable. Just like any other currency, the bitcoin price goes up and down. So far, the Bitcoin price moved in certain circles. 300% up and 30% down again and again. After price increases, some investors tend to take out a profit. This is the time when the Bitcoin price drops.
How Bitcoin price is determined?
The Bitcoin price is determined by supply and demand. Just like any other currency, stock, or futures. When the demand for Bitcoin falls, the price falls too. When the demand for Bitcoin increases, then the price increases as well.
What’s Bitcoin price?
Bitcoin price is expressed in a different currency. For example, the US dollar can be expressed against the euro, Japanese yen, or British pound, etc. A different price will apply to each of them. Bitcoin can also be expressed in USD, EUR, JPY, etc. but also in comparison to other cryptocurrencies. Therefore, you will always see prices for BTC/USD or BTC/EUR.
Can Bitcoin price be manipulated?
Yes, the Bitcoin price can be manipulated in different ways. Manipulative traders f.e. leverage their positions across a number of exchanges to impact the Bitcoin price by buying or selling huge volumes. Secondly, we have seen manipulations through Tether. Their coins have been created without adequate reserves of the US dollar. New Tether coins have then be used to buy Bitcoin, which resulted in increased Bitcoin prices.
Is Bitcoin price going up?
Yes, the Bitcoin price is going up. The reason is simple: Driven by new Bitcoin customers and increased demand for this cryptocurrency, the price will continuously rise until the demand falls.
Why Bitcoin price is going up?
The Bitcoin price is going up because new buyers coming in every day. Furthermore, we see more and more institutional investors stepping in. In the daily news, we hear that companies such as JP Morgan Chase or Bank of America showing interest in cryptocurrencies. Therefore, the demand is increasing day by day.
How Bitcoin price works?
The Bitcoin price works by supply and demand. Simple as that. When demand increases, the Bitcoin price increases as well, and when demand falls, the Bitcoin price falls again.
When Bitcoin price will go down?
Bitcoin price will go down as soon as demand falls. This is happening continuously. On the other hand, the demand is still increasing as more institutional and individual investors joining the market. So far, the Bitcoin price went down when investors took out their profits from price increases.
When Bitcoin price will go up?
The Bitcoin price will go up continuously. It seems like the demand is growing and growing. Supply is enough there. Therefore, the future of the Bitcoin price is very bright.