A Christmas full of cheer for hodlers tops out above $28,000, amid
warnings that Bitcoin is already in regulators' crosshairs for 2021.
Bitcoin (BTC) has had a week like no other, hitting fresh record highs of $28,400 and staying near the top — what's next.
As
markets return to digest a wild Christmas, Cointelegraph presents five
factors set to help with Bitcoin price direction this week.
Gold surges as Trump signs stimulus bull
Markets have been spared a nightmare this week after U.S. President Donald Trump agreed to sign off on Congress’ $900 billion coronavirus stimulus bill.
Set
to add a large amount of debt to the Federal Reserve’s existing
mountain, the package includes various benefits for businesses but stops
short of providing Americans with the same level of direct financial
support seen in March.
Trump had said that the low direct payment
amount of the second stimulus — $600 against $1,200 last time — meant
that he could not condone it, but subsequently changed his mind.
Markets have thus begun a new week on a positive note, with slight gains seen on S&P 500 futures prior to the Wall St. open.
At
the same time, gold has returned in style, with data showing that the
precious metal is now on track for its biggest one-year gain in a
decade.
Versus the end of November, XAU/USD is up $111 or 6.25%.
“As
President @realDonaldTrump vetoed just nine bills, the fewest number
since Warren Harding, who served just two years, from 1921-1923,” gold
bug and infamous Bitcoin naysayer Peter Schiff tweeted as the bill was signed.
“Not
since Chester Arthur (1881-1885) has a president who served a full term
vetoed fewer bills. You can't drain the swamp by making it deeper.”
Regulations coming for mainstream Bitcoin
After
striking a fresh tone with a wider audience over Christmas with runs to
new all-time highs, Bitcoin may soon have to face the music with the
establishment, sources warn.
Hitting $28,400 and capping monthly
gains of 55%, Bitcoin is now firmly on regulators’ radar as its
mainstream appeal heightens. Even for its proponents, the next year may
prove to be a challenging time.
With outgoing Treasury Secretary Steven Mnuchin leaving his mark
with an attempt to force new laws over noncustodial wallets, his
replacement, Janet Yellen, may hardly be an improvement, they say.
“Generally,
I think we have had challenges with the Dems — they prefer more
regulation, more oversight,” Meltem Demirors, chief strategy officer at
digital-asset manager CoinShares, told Bloomberg on Sunday.
“I am a bit worried about the direction things are trending.”
As
always in the U.S., the patchwork of political allegiances means that
any assault may be tempered by the presence of crypto-friendly figures
elsewhere. The new chair of the Securities and Exchange Commission
(SEC), Elad Roisman, is considered to be a fan.
Bitcoin rebuttal at $28,400 "very healthy" — analyst
Concentrating
on the latest Bitcoin spot market action, Monday is shaping up to be a
major test for bulls given the momentum seen over the weekend.
After hitting all-time highs of $28,400 on Sunday, Bitcoin saw a pullback which many had already expected.
“#Bitcoin
undergoing a very healthy correction as it went quite vertical. Might
be the temporary top for now,” Cointelegraph Markets analyst Michaël van
de Poppe summarized on social media.
“What's
next? Consolidation, sideways action, less volatility. Giving space to
the rest of the markets to pace up. $BTC pairs doing well.”
Van
de Poppe is eyeing the potential for altcoins to begin their response
to Bitcoin’s recent glories, arguing that signs are already beginning to
appear that “altseason” is around the corner.
“After #Bitcoin
finishes the run (and it is quite vertical), the money will flow towards
large caps. And after that towards mid-caps and small caps,” he
continued.
“Altcoins are not dead, the money flow is still the same.”
While
floundering against BTC, some popular altcoins are still delivering
significant returns in USD terms, with market leader Ether (ETH) trading above $700 for the first time since May 2018. Versus its lows of $113 in March, ETH/USD is now up 530%.
Record Bitcoin futures gap
Bitcoin is contending with the largest “gap” to ever appear on futures markets this week.
Data
from CME Group’s futures shows that on Friday, trading ended at around
$23,825. Monday began with a wick to lows of $26,500 from opening
levels, with the difference ranking as the biggest ever seen in a
weekend.
These so-called futures “gaps” refer to the void between
Friday and Monday trading sessions, and the BTC/USD spot price has a
habit of returning to “fill” them later on.
In recent weeks,
however, this trend has weakened, with gaps remaining between $16,900
and $19,500 which have only been partially filled.
This has in turn given rise to theories among analysts — including
Cointelegraph’s Van de Poppe — that Bitcoin could still reverse
downwards to revisit sub-$20,000 levels just long enough to take care of
its unfinished business.
Should that not in fact occur, analysts
may instead need to come to terms with the loss of what was once a solid
indicator of near-term Bitcoin price trajectory.
Stock-to-flow forecasts the high
On the topic of price trajectory, the latest action puts Bitcoin at odds with one of its best-known and most reliable price models — stock-to-flow.
After rising
to hit exactly what the model’s demands last week, the weekend ensured
that BTC/USD outperformed, with Sunday’s retracement to the mid $26,000
range ensuring compliance swiftly returned.
As
noted by both its creator PlanB and Saifedean Ammous, author of “The
Bitcoin Standard,” Bitcoin is overall staying highly faithful to what
stock-to-flow requires on an almost daily basis.
“Bitcoin's price
continues to track the predicted value from @100trillionUSD 's
stock-to-flow model with astonishing precision,” Ammous summarized.
Going
forward, the model’s various incarnations demand price levels of
anywhere between $100,000 and $576,000 between now and the end of the
current halving cycle in 2024.
source link : https://cointelegraph.com/news/altseason-and-30k-in-sight-5-things-to-watch-in-bitcoin-as-2020-ends
