Are strong technicals sufficient to drive Bitcoin’s price to $100,000 in 2021?

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Despite the fact that Bitcoin has been struggling for the past week or two, a price objective of $100,000 appears to be attainable for the digital asset.

Bitcoin (BTC) appeared to be well on its way to reclaiming its prior all-time highs after scaling up to a relative high of around $53,000 just over two weeks ago. However, the events of the past week have caused the world’s largest cryptocurrency by total market capitalisation to drop over 13% of its value, with a single BTC currently selling near $45,800.

However, the aforementioned volatility appears to have unfazed Standard Chartered’s cryptocurrency research section, with analysts referring to Bitcoin’s most recent collapse as a “false dip” and reaffirming that the flagship cryptocurrency’s year-end aim of $100,000 per BTC is well within reach.

The banking behemoth expects Bitcoin will have reached $100,000 by “late 2021 or early 2022,” which will be accompanied by a significant increase in the value of Ether (ETH). Indeed, the research team stated that Ether is “structurally” valued at a year-end price point of $26,000 to $35,000, but, in order for that to happen, BTC must scale up to $175,000.

Contributing factors

To get a better idea of whether a year-end projection of $100,000 per BTC is still feasible, Cointelegraph reached out to Ben Caselin, head of research and strategy at cryptocurrency exchange AAX. In his view, last Tuesday’s sell-off was a classic “sell the news” move, adding that he believes that an elaborate “bear trap” may have been at play. Caselin said:

“I do expect $100K is still in play for Bitcoin this year — if anything, $100K would be underwhelming. In fact, if we follow PlanB’s stock-to-flow, we are still moving in the lower band, tracing ‘worst-case-scenario prices,’ which stood at $47K last month, $43K in September, and no less than $135K at the end of the year.”

He added that when it comes to Bitcoin, there is more value in looking at on-chain data rather than price technicals alone, as it allows users to gain a more high-resolution view of what’s actually happening across the network in real-time.

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Similarly, Tommy Schreiner, senior research analyst at crypto data provider TheTIE, told Cointelegraph that there is still a healthy chance that Bitcoin can reach $100,000 by the close of 2021:

“$100K seems as ridiculous perhaps as $50K did last year, but there are factors in play that don’t completely out-rule that scenario. The recent pullback was mostly a de-levering of the market, as a large percentage of leveraged open interest got wiped out and effectively reset all the bullish traders who were going YOLO.”

Schreiner further emphasized that despite all the economic turmoil across the globe, the United States Federal Reserve has shown no signs of stopping the money printer, something he believes to be a good sign for relatively riskier assets such as cryptocurrencies.

Furthermore, he stated that layer-one solutions like Solana, Terra, Avalanche, Polygon, and Fantom have continued to bring in fresh money into the global digital asset ecosystem in recent months, which may help boost BTC’s value.

“NFTs [nonfungible tokens] are burning a huge amount of Ethereum every day, despite pricing out a lot of retail users. So if $100K seems ridiculous, perhaps look at how far crypto has come in just a year,” Schreiner said.

According to Nick Spanos, co-founder of Zap Protocol, El Salvador’s recent acceptance of Bitcoin as legal tender puts the digital currency on track to reach $100,000 by the end of the year. “Ether is also aiming at $10,000 by then,” he added.

Some doubts for $100,000

Lennix Lai, financial markets director at cryptocurrency exchange OKEx, believes that while Bitcoin’s future seems poised for good things, that doesn’t necessarily mean the premier digital currency will close out the year at $100,000. He told Cointelegraph:

“I think we would see a short-term correction considering the loom on upcoming tapering from the U.S. Bitcoin is still very sensitive to the global money supply. Yet at the same time, the cryptocurrency is becoming a legitimate alternative asset class and everyone is looking for certain portions of asset allocation.”

Lai did admit that if even 1% of the world’s total wealth were to flow into Bitcoin in the near-to-mid term, a price objective of $100,000 per BTC could be readily accomplished.

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Similarly, Igneus Terrenus, head of communications at cryptocurrency exchange Bybit, believes that the approval of a Bitcoin exchange-traded fund (ETF) in the United States will help open up the BTC market to new participants such as retirement funds and wealth management products.

“SEC punted the [BTC ETF] decision from Sept. 8 down to its new date of Nov. 14 — still within the calendar year of 2021. Anecdotal evidence shows that almost all wealth managers are asked by their clients about Bitcoin exposure. An ETF may just be the right vehicle for this to happen,” he told Cointelegraph.

Bitcoin’s technicals look strong

In spite of recent volatility, Bitcoin’s fundamentals seem to be quite strong at the moment. In this regard, Charles Edwards, creator of one of the world’s most well-known Bitcoin metrics, Hash Ribbons, recently claimed that as long as the flagship cryptocurrency is able to hover above its all-important $42,000 resistance zone, it will continue to remain in the green.

Late last year, Edwards predicted that by the end of 2021, Bitcoin could be looking at a price target of between $100,000 and $200,000. He said he would be “shocked” if Bitcoin didn’t hit $50,000 in 2021, a projection that came true after the currency reached its all-time high of $63,000 earlier this year.

According to Edward, one of the most significant contrasts between this rally and prior ones is the very low level of retail interest seen across the board. In fact, he believes Bitcoin will need to spend a significant period of time over $50,000 in order to establish a new all-time high this year. “I believe that would reawaken more retail interest,” he said.

Even while $100,000 isn’t in the cards for Edwards, he believes the market is steadily approaching the price point. However, for it to happen within the next three to four months, he believes that either renewed retail interest needs to be generated or a significant number of purchases from leading S&P 500 companies like Tesla need to take place.

See also  Taking a look at where Bitcoin and Ethereum stand 100 days following the meltdown in May.

Looking ahead

In comparison to prior events, the monetary consequences of the 2020 halving have been quite mild thus far, with Bitcoin only experiencing a 4x boost in value. In comparison, we can see that in the years after the halvings in 2012 and 2016, BTC’s value increased by 55x and 15x, respectively, implying that a move beyond $100,000 is still plausible.

It will be interesting to see how the next few days play out for the cryptocurrency market as a whole, especially as regulators around the world tighten their grasp on this still-nascent industry.

 

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