Where Does Bitcoin Go From Here?
By Bogdan Giulvezan
Just recently, Bitcoin reached a new All-Time High (ATH), at exactly $42,000 according to TradingView charts. And while this is a great achievement and a major talking point, some of us are forgetting another bit of information, which may be even more important: after breaking the previous ATH, Bitcoin DOUBLED its value in less than a month!
On December 17, 2017 Bitcoin reached its highest price to date, stopping just shy of the $20K mark. Exactly three years later, on December 17, 2020, that ATH was broken and Bitcoin was trading at a daily high of $23,629. Fast forward just a bit, to January 2021 and Bitcoin was trading at $42,000!
What this tells us is that a new ATH is very bullish and although now Bitcoin is completing a retracement, higher prices are very likely to follow. And because usually, altcoins are following Bitcoin, it’s not farfetched to assume that coins that break their ATH, will skyrocket after the fact. With that in mind, let’s look at two cryptocurrencies that either broke their ATH or are close to it.
Polkadot’s native token DOT has recently broken its previous ATH (just below $7) and doubled in just a few days, currently trading at $14.09 according to CoinMarketCap. Is there potential for more upside? Probably yes, but be wary that a retracement may come first.
Ethereum came very close to breaking its ATH on the 10th of January this year but has since retraced lower and bounced back in close vicinity of the ATH located at $1,432.88 (currently trading around $1,230). If ETH will behave similarly to BTC and DOT, then we could see it trading at around $2,800 in just 2 or 3 weeks’ time. Is that a wild prediction? Well, considering the other two examples, it’s not. However, remember that there are no rules here. The crypto market does whatever it wants and is a hard-to-tame beast. Be cautious.
Chart Analysis – BTC/USD
Currently trading at 38,540 against the US Dollar, Bitcoin is coming off highs at $42,000 and bouncing from lows situated in the $30,000 region. These wild swings happened in the span of only one week, showing once again how volatile and unpredictable the crypto market can be.
Price bounced at $30,000 (which is now strong support for future price action), and it is struggling to break $40,000 once again. If 40K can become support, the battle for 42K will be in full force once more and if the ATH is broken, we will probably see another strong climb.
Before the pullback, the RSI was overbought for a long time, thus the signs of a drop were present, but as we can see now, the RSI cleared the overbought territory and seems primed for another climb. However, as long as the previous peak is not broken, traders should be cautious with their long positions.