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- Bitcoin currently trades for $19,2000, having stabilized due to a lack of volume on the weekend.
- Some analysts remain bullish in the near term as the cryptocurrency holds the $18,500 region.
- $18,500 has been an important level for bulls over the past few weeks.
- One such analyst that drew attention to this trend is the same one that predicted late last year that Bitcoin would hit the $3,000s this year.
Bitcoin Bullish on Short Term Basis
Bitcoin has consolidated between $18,000 and $19,500 over the past few days after a strong drop on Thanksgiving. The price of the leading cryptocurrency currently is $19,200, with the price stabilizing as volume has subsided on the weekend.
Some analysts remain bullish in the near term as the cryptocurrency holds the $18,500 region. One crypto-asset analyst recently said that he is still bullish because Bitcoin has held $18,500. He previously said that “bulls do not want to see price below $18,500.”
The trader that made this assertion is the same one that at the end of 2019 predicted BTC would fall to the $3,000s. He was proven correct just months later when the cryptocurrency fell from the $8,000s-$10,000s to $3,500.
There are some that are concerned, though, namely due to short-term on-chain trends. Ki Young Ju, the CEO of CryptoQuant, recently said that there has been an increase in the number of whales depositing capital into exchanges. This may suggest that there is a sell-off on its way:
“Whale Ratio on $BTC spot exchanges indicates the short-term bearish trend started. Historically, if this indicator goes above 95%, meaning 95% of deposits are from the top 10 deposits, the market is likely to be bearish or going sideways.”
The same indicator that he referenced above was printing bearish signals at the 2019 highs of $14,000, and prior to the drop at $10,000 earlier this year.
Historical precedent would suggest that Bitcoin may soon drop.
Halving Effect to Drive BTC to $100,000
Whatever happens in the near term, most expect long-term trends to drive Bitcoin much higher in the years ahead. Brian Estes, chief investment officer at hedge fund Off the Chain Capital, said to the Globe and Mail recently:
“I have seen bitcoin go up 10X, 20X, 30X in a year. So going up 5X is not a big deal.”
He pointed to the Bitcoin stock to flow model, which suggests that the cryptocurrency’s price action is somewhat correlated with the inverse of its inflation rate. The model predicts that due to the last halving, the price of BTC will rally past $100,000 by December 2021. Variations of the model predict even greater price action.