In the last three months, BTC volatility stood at 87% versus 16% for gold according to JPMorgan.
The much-awaited $50K BTC price tag was reached on Tuesday. At first, the largest cryptocurrency was flirting with this level. Bitcoin has now cemented its place since climbing as high as $52K. On top of this, the asset is less than $50M away from hitting a one trillion market cap. Much like hitting $50K, a one trillion market cap looks inevitable in the next few days. However, now Bitcoin price is slightly lower than its ATH which makes bulls nervous.
The current Bitcoin frenzy has been triggered by recent institutional interest. The biggest one was by Tesla which announced on Feb 08 it was buying Bitcoin worth $1.5B. Others invested or considering adding BTC to their balance sheet include BlackRock, BNY Mellon, Twitter, Visa, and Mastercard. However, JPMorgan has questioned the real reason for the recent growth pointing out that institutional investment only accounted for $11B. But during the institutional frenzy, Bitcoin has more than doubled from its 2017 high.
Will Bulls Manage to Hold Bitcoin at $50K?
In the last three months, BTC volatility stood at 87% versus 16% for gold according to JPMorgan. This has drawn criticism on Bitcoin. While the narrative that Bitcoin is set to replace gold has its strong aspects, volatility is not one of them. Volatility characterizes the crypto market and with a pivotal level like $50K, Bitcoin is about to go on a wild rage.
If the bullish scenario plays out, in the short term, $50K will be its higher support while greater support will be established at $48K. In the long term, most analysts agree that Bitcoin will end above $100K. Anthony Scaramucci, former communications director for President Trump who has recently been bullish about Bitcoin stated he expects BTC to close the year above $100K. Scaramucci who is also the founder of SkyBridge Capital added that his prediction was based on supply and demand. Speaking to CNBC Squawk Box he added:
“We have over a half a billion dollars in bitcoin right now. And obviously, our bitcoin fund started in December. It’s done quite well.”
Recent data from Glassnode shows that there are around 94K addresses holding BTC worth $1M. These are heavy, long-term holders who are set to support BTC from massive dips in the short term.
There are 94,000 adresses holding $1m+ Bitcoin and it’s growing everyday.
— Bitcoin Archive (@BTC_Archive) February 18, 2021
At current levels, retail investors taking profits will make it hard to keep prices above $50K if there is no big development soon. Prices will be until the next big news be characterized by sideways movement. But once the breakout is confirmed, prices should seamlessly climb above $60K.