No One Can Stop Crypto and Blockchain Revolution – Price Analysis, 18 Jan 2021
Last week, many institutional investors announced very positive price targets for Bitcoin and cryptocurrency in general. In an interview on CNBC, Guggenheim Partners investment director Scott Minerd confirmed once again his long-term forecast for Bitcoin's growth to $400,000.
Dan Morehead, CEO of cryptocurrency hedge fund Pantera Capital, said that the price of Bitcoin would rise to $115,000 by August 2021. In a presentation for their investors, Bakkt analysts forecast that the cryptocurrency market could grow from currently $1 trillion to $3 trillion by 2025.
However, the growing popularity of Bitcoin and cryptocurrency has attracted the attention of global regulators. ECB president Christine Lagarde expressed her concerns towards Bitcoin by calling it a 'speculative asset' that needs to be globally regulated:
Nevertheless, some of the key players in the crypto world do not think that global regulators can stop the blockchain revolution. Tyler Winklevoss, the co-founder of Gemini crypto exchange, expressed skepticism about Lagarde's statement and said that no one could stop Bitcoin:
This past week most of the leading cryptocurrencies entered a period of consolidation. The Monday market starts with a continuation of this trend. At the time of writing, according to Coin360.com, one Bitcoin costs €29,778.37 (+3.41%), one Ethereum – €1,006.02 (+2.39%), and one LINK – €18.64 (+11. 43%):
Source: Coin360.com (Daily crypto market performance)
Now let us analyze the price charts of the major cryptocurrencies in the key time frames.
Last week, a Hanging Man candlestick formation appeared on the weekly chart (1W) of BTC/EUR:
According to the technical analysis theory, the Hanging Man is a trend reversal pattern, visible at the top of the chart after a substantial price advance. Moreover, the current Hanging Man candlestick has a local high below the previous one – an additional bearish signal.
However, the local low of the Hanging Man did not drop below the previous one. That is why we think there is no confirmation of the bearish signal, and it is too early to say a trend reversal is in front of us.
If we have a look at the 1-hour chart (1H) of BTC/EUR, we may spot a Symmetrical Triangle:
The Symmetrical Triangle indicates BTC/EUR is currently in a consolidation phase. In our view, the direction in which Bitcoin will continue to move in the short run depends on which direction the price will exit the triangle.
The weekly chart (1W) of ETH/EUR is very similar to this of BTC/EUR – last week ETH/EUR formed a Dragonfly Doji candlestick, which is quite similar to the Hanging Man candlestick:
According to the technical analysis theory, the formation of a Dragonfly Doji after a price advance warns of a potential price decline. The local high of the Doji is below the previous one – an additional bearish signal. However, its local low did not renew the level of the previous one. Therefore, there is no enough confirmation of the potential trend reversal.
Conversely to the slight bearish signal in the weekly time frame, in the 1-hour time frame, Ethereum is forming a slightly bullish signal – namely, an Ascending Triangle:
We think that if a breakout takes place and ETH/EUR exits the triangle in an upward direction, then it will be a favorable opportunity to open long trade.
This past week, one of the best performers in the crypto market was Chainlink. In the daily time frame (1D), LINK/EUR went through the Ascending channel effortlessly:
With this in place, it seems that LINK/EUR is trying to accelerate the uptrend.
We think that now, the previous local high will serve as support for the price of Chainlink. That is why if the price pulls back into the range of the previous local high, it may receive support and subsequently rebounds:
Therefore, it is worth keeping an eye on the daily chart of LINK/EUR and taking advantage of this potential scenario by opening a long trade.
Stay updated on everything Bitcoin-related with Bitvalex. Bitvalex is a licensed digital wallet and cryptocurrency exchange; learn more about us and blockchain technology and sign up to use our services.
The analysis is purely informational and does not constitute investment, financial, trading, or any other sort of advice and you should not treat any of Bitvalex's content as such. Bitvalex does not recommend that any cryptocurrency should be bought, sold, or held by you. You are solely responsible to conduct your own due diligence and consult an advisor before making any investment decisions.