Bitcoin’s price surpassed $ 20,000 easily on its third iteration, fueled by a surge in purchase volume. Following the cut, analysts predict that the dominant cryptocurrency will eventually rise to the mid-$ 30,000s. However, in the short term, expectations of withdrawal are growing.
There are compelling arguments for short-term bull and bear cases. Traders who are extremely optimistic in the near term indicate that the surge past $ 20,000 has confirmed a new bull trend. With no technical objection above it, it is anticipated that the rally will continue. Because there is no historical data to rely on above $ 20,000, Bitcoin (BTC) has entered unprecedented territory.
Short-term volatility analysts expect Bitcoin to face some price in the near future. The $ 20,000 level continues to be an attractive support level because this is the previous highest peak ever reached in December 2017. Re-testing the previous peak would be the technical pattern of a textbook, which would reset everything and make the derivatives market less crowded.

Where will Bitcoin go in 2021?
The options market is pricing a potential Bitcoin rally up to between $ 36,000 and $ 50,000 in the medium term. This indicates that many option traders expect Bitcoin rally to continue into 2021. A larger increase in early to mid-2021 would make BTC repeat the post-halving trend it saw in 2017. In 2016, Bitcoin saw its second block prize halved, and 15 months later, it peaked at around $ 20,000.
Denis Vinokourov, Bequant’s head of research, told Cointelegraph that the options market that priced Bitcoin at $ 36,000 during a rally doesn’t necessarily mean traders expect it to reach $ 36,000. For example, he explained that the probability of the $ 36,000 strike is currently at 12%, which is relatively low. So while $ 36,000 and $ 52,000 may come up, for the time being, the probability remains low:
“The options market is as much about the mis-pricing of trading and hedging as it is about directional play. The fact that there is huge open interest resting on such a high strike does not mean that the underlying will trade there, although it is reasonable to expect some price attraction. High OI is also at $ 52,000, but the delta (probability) is slim at four percent. “
Guy Hirsch, US managing director at eToro, said options interest suggested a rally to the mid-$ 30,000s could happen. But Hirsch stressed that it is too early to call Bitcoin a climax, especially given that it has just surpassed its highest ever. It has been less than 72 hours since BTC broke its record high, and has yet to establish support and resistance levels in the near term.

A short-term bearish scenario puts Bitcoin at $ 20,000
Vinokourov and Hirsch anticipate that dips are likely to occur following the recent rally. Historically, throughout the bullion cycles observed in 2017 and 2019, Bitcoin saw 20% to 40% setbacks, which was useful to reset the derivatives market. Withdrawals can make rallies more sustainable because they prevent congestions from overheating and overwhelming buyers.
Hirsch told Cointelegraph that $ 20,000 and $ 15,000 are potential areas that Bitcoin could correct for if confidence declines. But if Bitcoin’s momentum continues to strengthen, it believes Bitcoin could simply consolidate higher. Even if setbacks occur, Hirsch stressed that dips would be short-lived due to the apparent increase in institutional demand. He explained: “Either we consolidate and move higher as organizations take advantage of the buying opportunity, or confidence falls and we see a potential fall to as low as $ 15,000, as do some including JP Morgan has suggested. ”
Analysts generally expect large corrections, if they occur, to be bought by institutional investors quickly. Vinokourov said that if profits were to occur, the institutional investors would rebalance their portfolios. Therefore, in this scenario, retail investors could start buying the dip, with institutional investors building up later. While institutions have continued to buy throughout 2020, some accredited institutions and investors have been buying for $ 4,000, according to Vinokourov, who added:
“The price action following the $ 20,000 break has been largely unilateral but, as it stands, there is no sign of liquidity drying up or market makers getting it wrong and blowing up. Instead, the price action continues to be well managed thanks to an influx of retail flows, as much as institutional. For-profit retailing is not something retail is yet to consider, so any rebalancing by the institutional side is likely to be met by dip buying flow. “
The most ideal scenario for Bitcoin?
Bitcoin has rallied continuously since September, with one big dip to $ 16,000 in November. Apart from that, BTC has not seen major setbacks or prolonged squeezes as of 2017. This has some analysts considering whether market dynamics have changed for Bitcoin and large corrections are less likely to occur.
One of the main reasons behind the serious lack of corrections is Bitcoin’s declining reliance on the futures market. Spot volumes have been growing, driven by growing institutional demand across locations like Grayscale, CME and Bakkt. Therefore, long and short squeeze could have a smaller impact on the Bitcoin price trend.
The most favorable trend for Bitcoin, according to Hirsch, would be to establish a clear support area and reduce volatility, for at least a while. Bitcoin volatility has been intensifying for a long time, which has ravaged the markets every time a large price movement has taken place. According to Hirsch: “It’s important to realize that with each passing month we have been consistently hitting highs and lows. The latter is important because it is a strong indicator of increased adoption. ”