Bloomberg: This year will be a key test for BTC to complete its transformation into a quasi-currency
Recently, Bitcoin seems to be in a dilemma, and the long-short game is extremely fierce. People have long expressed doubts about the fundamental value of cryptocurrencies. However, in today's turbulent world, the macroeconomic landscape is evolving, especially with cryptocurrencies, especially Bitcoin.
Recently, Bloomberg published a report saying that Bitcoin is accumulating strength for the bull market. Even the headline of the report expresses a clear bullish view - "Bitcoin's great leap forward in maturity". Bloomberg believes that this year Bitcoin will complete the key test of the transition to a quasi-currency like gold.
The report mentioned a number of reasons why the bitcoin market is maturing. The report also affirmed that “Bitcoin is gaining relative fuel as the stock market resets, if history is any guide.”
In addition, according to Bloomberg, Bitcoin and gold, two perceived safe-haven assets, are expected to gain the most from the recent market turmoil induced by the new crown pandemic.
But according to a prominent cryptocurrency analyst, if bitcoin hits a certain price point, it could spark a market frenzy — in other words, a skyrocketing price.
Last Saturday, a trader with 200,000 Twitter fans and the user name CryptoYoda released his latest series of technical analysis articles, in which he explained that the Bitcoin market structure tends to go down due to the formation of a rising wedge and the formation of a gimmick. Shoulders — two textbook bearish signals — but a break above $7,475 would overturn that, “forcing shorts to liquidate their positions while encouraging longs to buy them.”
"A breakout at such a high would lead to massive short covering and buy volume would drive a strong rally, especially as buyers have bought through previous lower resistance levels."
What he wants to explain is that if Bitcoin successfully breaks out, it can prove that the current sideways movement is not a hint of a top, but a process of consolidation and continued higher, which may reach $8,000 or even higher.
Avi Fairman, a trader and analyst at crypto asset fund BlockTower, observed two technical signals on Friday that clearly point to a correction in bitcoin prices soon:
01
The DeMark Sequence is a time-based indicator that presents a sequence of consecutive counts of sells on a 3-day candlestick chart. The previous two times the same happened were in mid-March and December 2019, when the currency price bottomed out, but it topped out at $10,500 earlier this year.
02
Ethereum seems to be unable to break through the 50-day and 200-day moving averages on the 3-day K-line chart.
In addition, Avi Felman said that while the recent daily line does not show a "strong downtrend", it is "extremely close to the unfolding of Bitcoin at the top of $10,000." Structural similarities between that period and the present.
A Bloomberg report, "Bitcoin Maturity Jump," says Bitcoin is preparing for a massive bull run. In the report, the author elaborates on the correlation between Bitcoin and the S&P 500, gold, zero and negative interest rates. Stock market turmoil has accelerated Bitcoin's transition to "digital gold," the report said.
2020 will be the year to judge whether Bitcoin can transform from a risky speculative asset to "digital gold." From a volatility perspective, bitcoin volatility appears to have declined, while stock market volatility has begun to rise, and this market reaction will also allow more people to move funds into encrypted assets.
