Outlook: Bitcoin erupted higher for the fourth consecutive week, eclipsing the $30K level easily and rallying up to the $35K level before finding a bit of resistance to close the weekly candle around $33,500. Bitcoin has broken out on the long-term charts in a big way here, decisively breaking above long-term resistance around $20K to rocket up to higher highs. Bitcoin will eventually have a pullback, but we're not in the business of shorting strong bull markets, especially in a rapidly growing asset class that likely has a lot more room to grow than fall, even at these levels.
(December 27, 2020 7:30PM EST)
Bitcoin continued higher yet again, steadily grinding higher throughout the week before exploding higher late into the weekend to new heights as Bitcoin has crested the one-third mark of a six-figure valuation. At this rate, Bitcoin will have an even more bullish 2021 than 2020, which started off on a weaker note but quickly rebounded along with equities, only to outperform all other asset classes markedly by year-end.
I think institutional FOMO is starting to kick in as companies feel increasingly more comfortable with allocating a small percentage of their treasuries and balance sheets to Bitcoin. It's become evident that in the past few months PayPal's Bitcoin buying has amounted to multiple times that of the newly minted BTC entering the total circulating supply. Demand has clearly outpaced supply and will continue to do so in perpetuity, as we can again expect another supply reduction in 2024 with the next programmatic halving event. This is not for a while but is something to keep in mind as more institutions enter the space and retail FOMO in.
As far as price targets go, I think it's only a matter of time before BTC hits $50K, $75K, and then $100K, the first of which we will almost certainly see in H1 2021. Now, based on my traditional market and equity analysis, equities have gotten extremely overbought to the upside and are due for a significant correction probably in late Q1 or early Q2 2021 which I suspect will likely have a collateral effect on Bitcoin and the greater crypto space's prices. That being said, I think any such correction will be a fantastic dip-buying opportunity and medium-long term value as Bitcoin resumes higher to end 2021 and enter 2022 with eyes on $100K. Also, once BTC hits $50K, $1,000 or even $2,000 levels will be insignificant as even a $2,000 move is merely a 4% price movement. Accordingly, I think we'll definitely start seeing price movements in $5,000 and even $10,000 intervals with resistance levels occurring every $10,000 and $25,000 up to $100K and higher. Until then, look for moves in $5K intervals: $40K, $45K, and $50K. Then, $60K, $70K, $75K, etc.
Demand is high and only increasing, supply is fixed, limiting, and decreasing, and fiat currencies like the US dollar and Euro are being massively inflated. These three variables provide and extremely bullish macroeconomic environment for cryptos like BTC, all of which support more buying, less selling, and higher valuations for BTC going forward. If you're not bullish, you're wrong; it's that simple.
Support: $20K is my hard support line at this point, though I doubt Bitcoin will retrace almost 50% all the way to touch that level given the level of bullishness currently flowing throughout the market. I think a pullback to $25K is more reasonable and will provide a healthy discount to what will almost assuredly an exponentially higher future valuation.
Resistance: Look for resistance at large, round psychological numbers in $5,000 intervals: $35K, $40K, $50K, etc.
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