Bitcoin is entering another period of low volatility, hovering right below all time highs. As we've all seen time and time again, the lower Bitcoin volatility gets for an extended period of time, the higher of a chance it has to explode in one direction or another.
When Bitcoin begins to stabilize but volume is low, the market tends to panic. Often price will fall without enough volume to justify it, especially when volatility is low. However, we are in the exact opposite scenario.
Bitcoin volume is actually quite high at the moment. Volume on Coinbase is usually around 10k BTC per day. For the last week their volume has been at least 50% higher than that hovering between 15k-30k BTC per day. This is extremely bullish.
I consider Coinbase a good metric because they are a highly regulated and popular exchange that plays by the rules. While other exchanges have absolutely absurd volume numbers due to wash trading, Coinbase does not lie to prop themselves up on the list.
Volume is high but volatility is low.
The implication here is that there a lot of buyers and sellers at this level. Liquidity is high. Demand is high, and supply is high as well. These are all healthy developments for a thriving free-market.
However, this situation is not going to last for long. Imagine two pressure plates pushing against one another. One plate is at $19k pushing upward (demand) while another plate is pushing downward from all time highs at $20k. At some point, one of these plates is going to win out over the other, and either the longs or shorts are going to get squeezed as the price explodes out of this narrow band.
Obviously I believe demand is going to win out for various reasons. Supply is going to run out at this level and the price will explode past all time highs. The longer we sit at this level, the more pressure builds and the bigger the explosion.
Why bullish?
Not only is December normally a good time for Bitcoin, but also the stock market has performed well 100% of the time when November does quite well like it has this time around. Bitcoin volume and velocity are quite high at the moment. There's no reason to think that everything is going to crash into the mountain when all signals flash greed green.
Corporations are starting to realize that holding USD is a fool's errand when compared to gains in Bitcoin. Every year that goes by Bitcoin will capture more and more value. Eventually it will stop capturing value and be generating all that wealth from within. Every year it is getting more and more stable but the gains it makes become more consistent.
Central banks have been leeching value from corporations for over a hundred years. Now corporations have the tools to be like, "You know what? I think I'll just hold my value in Bitcoin." And unlike gold that simply stores value, Bitcoin is generating value by absurd unicorn levels of x2 per year. On top of that corporations can transfer this value anywhere in the world for what essentially rounds down to a 0% fee given a big enough transaction. It's truly a no brainer.
BUT ATH THOUGH!
We can see in the market and via testimonials, many many long time holders are betting against this level and selling here. Everyone who wanted to sell at all time highs but never got the chance are being given their opportunity right now. Everyone who thinks we are going to skim off ATH and crash from here is turning bearish. However, as I stated 12 days ago, when the market overwhelmingly seems to think something is going to happen, it rarely ever does.
There is simply way way way too much volume and low volatility to be anything other than super bullish right now.
Mind the gap
So we see there is a big supply and demand level in this $19k-$20k area. However, $20k-$21k is completely no-man's-land in my opinion. As soon as we push off higher from here we'll likely spend very little time in the area right above $20k.
Why is that?
Because everyone who is betting against the market and assuming we are going to dip from here is still a long-term Bitcoin bull. Most people are assuming that Bitcoin is going to run quite high in 2021. When Bitcoin pushes past $20k all of those people who sold thinking that wasn't going to happen are going to panic.
FOMO
Once we push above $20k where is the resistance? Nobody knows. We have to find it. It stands to reason a huge percent of holders who were gambling on the market will capitulate and FOMO back in at a loss. Such a rush could easily push us into the $25k range in less than 24 hours. The short squeeze is real.
Conclusion
I'm expecting a very big flag up in a matter of days or less. The trendlines are still overwhelmingly bullish, and if they go from linear to parabolic in December we should get the instability and blow-off top I was looking for that will signal the market needs to deflate for a few months.
Of course this is all gross speculation and all that, once again, but I really thought it was noteworthy to mention the volume of Bitcoin. Volume is high, but price isn't going anywhere. Everyone who's dumping is having that BTC scooped up by 'someone' else instantly.
Personally I'm still holding out for $50k Bitcoin before the end of the month.
Obviously for that to happen we're going to need to see some seriously explosive moves in the near future. Perhaps that prediction is coloring this particular post. You decide. However, I'm still seeing no evidence to suggest that this bull run is even close to over.
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Chyea. A 10% move to 22 seems pretty likely, and there won't be a very long pullback, either. I think we'll see strong moves up for the next several months, with short consolidations along the way.
This latest move from 10k to 20k in just a few weeks completes part 10 of 10 in my mid-2018 BTC price prediction. It was flawlessly correct right down to the dollar and the day, both on the tops and the bottoms. Guess it's time for another "I was more right than anyone else but still don't have 1000 followers" post. :P
Have a great Christmas!
Even if we don't hit $50K, we'd be much better off at $40K or $30K. I think we knew that $20K would offer much psychological resistance. At some point, sellers will run out of inventory they want to move, and we'll make a jump.
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Seriously? I have to check with you on Jan 01, 2021!
Well, if you are right, I am very rich on Jan 01.
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I think there's a small but significant chance it could happen.
Well, then there is a small chance I am retiring on Jan 01, and never work again :)
lol wow that's quite the statement.
Honestly considering your stake I'd say you're set for life no matter what happens.
Even planB stock-to-flow model puts Bitcoin at $100k in a year.
It is a bunch of 'if-else' statements though.
'If', you are correct on BTC = $50,000 call of Jan 01;
'Then', there is a 'chance' :)
I still have a day job. I like it, but at $50K BTC, I won't need to do it.
what is your day job?
I am a geologist
Well that is a bullish outlook if I ever saw one.
You are correct though. Once entering into all time high zone, it is new terrain. There is no telling what could happen. Resistance is non existent.
I think a topping of $20K sees $22K in no time. The ones who were looking for a pullback will jump in when they see resistance broken. Will it continue to your $25K level? It is certainly possible.
With all that is taking place, I wouldnt bet against it.
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Seems like every time the Biden administration gets more confirmed everything goes up. The DOW saw all time highs when their transition team was given access to the White House. I expect the market to keep doing its thing on Dec 8th and 14th when electoral college results get confirmed.
It did the same thing after Trump was elected.
Markets like certainty and elections are uncertain. One they have insight into what is going on, the market resumes its march.
I dont think the markets really care who is in the White House or who runs Congress. There was no friendlier President to the market than Trump. He never met a regulation he didnt want to throw out or a tax to cut.
That said, the market knows it will make money no matter what. They puppets in office are just noise. The money players will navigate around whatever roadblocks they put up.
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A sentence that should be expanded into a post.
re-blogging, so that I don't forget..... as I often forget.
You just gave me another new set of belief in bitcoin
Sounds a bit mad, but yeah, I can see that!
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The pressure is building up indeed and amateurs traders could panic, but I believe that the companies and investment funds that are in will hold their ground. More will follow up in the space and the price can only go higher, now the speed of it probably will not be revolutionary.
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With bitcoin, I think guessing whether it's going to be bullish or bearish without making concrete research is foolish.
This article does not only analyze the situation of things with bitcoin and other financial equivalents like Gold, stock markets and ath coin.
I feel that FOMO will certainly creep in once BTC hits 20k and the downward spiral might be too much to stabilize.
Lots of people use December to get what they will need throughout the next year and that may lead to us having more sellers than buyers. It might result in buyers dedicating prices of the BTC in the open market.
Your wish of BTC hitting 50k before 2020 runs out is impossible to attain given the high level of spending that happens during this year.
Lastly @Edicted. This post is educative and should be pined to the leofinance platform
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Dealing with Bitcoin requires an extra dose of attention, patience and coolness, haha!
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Is it possible to delete comments on Leo?
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technically you can never delete anything from blockchain... I never tried to delete something on peakd to see if it would delete it from LEO. Only the frontends can choose to omit information... which is how they "delete" stuff.
Well ,Of course this is all mass speculation and all that, once again, but I really thought it was noteworthy to accept and achieve.if you put about 25k in jam01,I guess we will all be rich