Bitcoin could hit $ 50,000 in the upcoming sessions as more and more organizations pool it against their fears of dollar-related inflation.
The leading cryptocurrency, whose market capitalization has recently surpassed Facebook and Tesla, fell below its highest record close to $ 42,000. Nevertheless, its plumbers prompted wealthy traders and institutions to buy it at cheaper rates, leading to further liquidity crunch against its limited supply cap of 21 million tickets.
As a result, the bitcoin price largely aggregates to the side, forming a structure that looks like a Symmetrical Triangle. In retrospect, the said pattern develops when the price forms higher lows and lower lows. Meanwhile, the trading volume is falling. Eventually, the price breaks out in the direction of its previous trend – upward or downward.
Bitcoin’s previous trend was bullish. Thus, the cryptocurrency’s possibility of identifying another upside-down run is higher on its movement out of the Triangle pattern. That should take its price above $ 50,000.
That is – again – because of a Symmetrical Triangle textbook description. An asset breaks out as much as the maximum height between the upper and lower trends of the pattern. In the case of Bitcoin, the height is around $ 14,000.
A move above the Triangle, along with an increase in volumes, expect to take the bitcoin price above $ 50,000.
Bitcoin Liquidity Crisis
Fundamentally, the price target looks achievable, at least according to a host of analysts who determine their market orientation based on indicators on the chain. For example, data analysts at Glassnode highlighted Bitcoin’s biggest liquidity depleted so far in recent weeks, suggesting its bullish for the cryptocurrency.
“Not only are funds being withdrawn from exchanges, but coins are constantly moving into strong hands,” they said. “In the last 30 days, some 270,000 BTCs moved to entities considered HODLers.”
“The [Glassnode] a chart might be more important than the price chart: bitcoin supply is withdrawn from exchanges at an all-time high, ” added Luke Martin, independent market analyst. “Historically, bull rings have come to an end AFTER flip flops change positive supply. That flip has not happened yet. ”
Part of the reason is relative higher demand for Bitcoin in the midst of an ongoing anti-inflation narrative. Joe Biden’s rise to the US presidential seat has increased the government’s additional spending forecasts to protect the economy from the aftermath of the coronavirus pandemic.
That means an abundant dollar supply that many consider to be bearish for the greenery.
Such fears have already pushed companies like MicroStrategy and Square to exchange a portion of their dollar funds for Bitcoin. Meanwhile, legendary investors like Paul Tudor Jones and Stan Druckenmiller have also invested small amounts in the cryptocurrency market, both of which believe it is the better version of gold.