A handful of altcoins look ready to move higher as Bitcoin price enters a short consolidation phase.
Christopher Wood, the global head of equity strategy at Jefferies, has dumped five percent of their physical gold position in order to buy Bitcoin (BTC). This move shows that a growing number of institutional investors consider Bitcoin to be at par or a better store of value than gold.
Wood also said that if Bitcoin were to have a big correction, he would buy more. The fact that institutional investors are content purchasing in the $16,000 to $20,000 range suggests that institutional investors are not worried about a pullback as they view it as an opportunity to accumulate for the long term.
One River Digital Asset Management also recently revealed a $600 million bet on Bitcoin and Ether. CEO Eric Peters, said the hedge fund plans to buy more Bitcoin and Ether in the first half of next year to take the total allocation in the assets to $1 billion.
This is further signal that the institutional demand for crypto assets is likely to remain high going into 2021.
Nigel Green, founder and CEO of deVere Group, expects Bitcoin’s bull run to continue in 2021 as the digital asset’s rally will be supported by the influx of “some of the world’s biggest institutions.” Green expects Bitcoin’s price to at least rise by 50% or even possibly double next year.
However, not everyone is convinced about the prospects of Bitcoin. Billionaire Mark Cuban said that Bitcoin is not a hedge “against doomsday scenarios” and it is “unlikely to replace fiat currency anytime soon.”
Will Bitcoin correct in the short term and give a bragging opportunity to the naysayers, or will it continue to rally higher? Let’s analyze the charts of the top-10 cryptocurrencies to find out.
Bitcoin (BTC) picked up momentum after it crossed the $20,000 psychological barrier on Dec. 16. The up-move continued on Dec. 17 and the price hit a new all-time high at $23,795.29.
The BTC/USD pair has formed an inside day candlestick pattern today, which usually acts as a continuation pattern. This pattern suggests that bulls are taking a break after the aggressive buying of the past two days.
However, the positive thing is that the price is close to the recent high, which suggests that bulls have not closed their positions in a hurry even after the sharp rally of the past two days. This indicates that traders expect the rally to extend further to $25,000 and then $26,000.
Although it is difficult to call a top in a market backed by strong momentum, the pair could face strong headwinds at $26,000.
On the downside, the critical level to watch is $20,000. If the bulls flip this level to support, then the next leg of the uptrend could resume. However, if the price dips below the $20,000 support and fails to recover the pair could witness a deeper correction.
Ether (ETH) broke above the $622.807 resistance on Dec. 16, which completed the ascending triangle pattern. This bullish setup has a target objective of $763.614.
However, after the breakout from a pattern, the price usually retests the breakout level. Even in this case, the price has corrected to $622.807.
If the bulls can flip $622.807 to support, it will suggest that traders are buying at this level. That increases the prospects of the continuation of the uptrend. The rising moving averages and the relative strength index (RSI) above 64 suggest that bulls have the upper hand.
This positive view will be invalidated if the price dips and sustains below $622.807. Such a move could suggest that the recent breakout was a bull trap. This narrative will be further strengthened if the price breaks below the trendline of the triangle.