Hi Everyone,
Technical analysis is inherently flawed. Reading the charts can only tell us what happened in the past and not what will happen in the future, but that doesn't mean we can't learn from the past, and right now, bitcoin is telling us something loud and clear.
In the last few weeks leading up to bitcoin's historic break above $20,000, the question was never whether it would surpass that level, but how, at least from an analyst's point of view.
Just as it broke $10,000 at the end of July, $12,000 in October, $14,000 in November and $16,000 in November, the breakout yesterday happened with incredible force, although perhaps not at first.
In fact, Messari data showed that only about $3 billion worth of bitcoin had been traded across exchanges in the last 24 hours when we stepped over the line.
Indeed, at around $20,600, the price stalled, as if to ask the market "hey, are we really doing this?"
After the initial break, however, the market response was clearly a "yes." Over the last 24 hours, momentum has been growing quite steadily.
At the time of this writing, exchange volumes over the past 24 hours were up to $14 billion, a number that seems to keep growing with every refresh. Further, the price as well has seen very little in the way of pullbacks, and it hasn't really stopped for many breaks this time.
A 29% gain over the space of a week may seem a bit frightening to some. As many will recall from 2017, 29% in a week was kind of a signifier that the market was overheating. Not today, though.
In our opinion, things are just getting started.
Just this morning, Scott Minerd, who is chairman of investments and global CIO for Guggenheim, stated that bitcoin's fair market value is probably closer to $400,000, a soundbite that Bloomberg played to every guest they've had on today.
If this is the case, then we probably shouldn't be using any old yardsticks when it comes to determining what kinds of percentage gains are possible. In fact, should demand continue to pick up from these levels and supply continue to constrain, there is a distinct possibility that we may see some days of 250% gains, or even more.
