According to some analysts, bitcoin will continue the bullish trend, but due to the high volatility, it faces a deep correction.
Today, bitcoin surpassed $19,900, updating a three-year high, but was not able to confidently break the historical record of 2017. Bitcoin has repeatedly tried to conquer this peak, but last week the BTC rate fell sharply by $3,000 in a few hours, pulling the altcoin market with it.
In December 2017, there was a similar situation. When bitcoin, after several attempts to continue growing, reached $20,000, by the end of January it had collapsed to $10,000. Many traders are concerned that this time the first cryptocurrency will behave in the same way.
However, eToro analyst Simon Peters (Simon Peters) believes that in December 2020-other realities, so everything will be different. He explained that now not only ordinary people are interested in bitcoin. Large organizations, including pension funds and hedge funds, invest in it. Corporations consider this crypto asset as a protection against inflation.
Compared to December 2017, the number of users who own bitcoin has increased by 66%, the analyst added. Peters is confident that the bitcoin exchange rate will continue to grow, and by the end of the year it will reach $25,000. However, there is a possibility that bitcoin may actually sink after taking $20,000, as traders will start to go out in cash.
Eric Wall, head of investment at Arcane Assets, said that by its very nature, bitcoin is very volatile. At the same time, the market is still crowded with a lot of traders who are ready only for short-term investments. Wall believes that if bitcoin is close to the historical peak, we should expect another fall, but this time the “bottom” will be much higher. Bitcoin will not return to $3,000 unless “something crazy” happens. For example, another pandemic that will stop the entire world economy.
The CEO and founder of AllianceBlock, Rachid Ajaja, is also less optimistic, believing that the current jump will necessarily be followed by a decline. At the same time, Ajaja is convinced that bitcoin can become an acceptable alternative to gold and an insurance against inflation for emerging markets.
It is noteworthy that recently an analyst of the financial conglomerate JPMorgan Chase Nikolaos Panigirtzoglou (Nikolaos Panigirtzoglou) expressed an opinion contrary to the statement of Peters. Panigirtzoglou believes that the big players can contribute to the growth and decrease of bitcoin.