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After surpassing $ 34,000 yesterday, Bitcoin hit another record, the last of many in December. Some analysts are betting that Bitcoin won’t stop anytime soon. Therefore, it may take some time before hopeful buyers can jump into BTC at a lower price.
For example, Antoni Trenchev, CEO of London-based crypto lending firm Nexo, said LiveMint that he believes the digital asset “will be on its way to $ 50,000 probably in the first quarter of 2021.”
Bitcoin in 2021: $ 50K, $ 100K, $ 500K?
Tom Lee, managing partner and head of research at Fundstrat Global Advisors, also has bullish predictions for Bitcoin. On Wednesday of last week (before Bitcoin hit its latest high of $ 34K), Lee said he believes Bitcoin will rise another 300% in 2021.
In a Tweet, Lee also pointed out that due to the halving that took place last year, 2020 looked a lot like 2016 in the BTC world. Therefore, he believes that 2021 could look a lot more like 2017, when the previous all-time highs for Bitcoin were set.
Therefore, Bitcoin could see a “parabolic surge” in 2021, Lee tweeted.
New #bitcoin target price $ 40,000
– established by our leading digital strategist @David_Grid
– 2020 = 2016 -> halving
– 2021 = 2017 -> parabolic riseBOOM🚀🚀🚀🚀🚀🚀 pic.twitter.com/tAb0r3mkgC
– Thomas Lee (@fundstrat) December 30, 2020
Similarly, Fundstrat digital asset strategist David Grider also said Wednesday that he expects Bitcoin to hit at least $ 40,000 this year, and with $ 34K already in the bag, $ 40K looks like it could be a piece of cake.
Bitcoin must be corrected, eventually. Therefore, buyers better wait.
Still, the way forward may not necessarily be linear.
In fact, some analysts are already bracing for a pullback. A cryptocurrency trader who operates under the nickname “Mr. Anderson ” tweeted on January 1 that a metric known as Bitcoin’s “monthly momentum reading” has not been as high as it is now for quite some time, and the last time it reached its current levels, disaster struck.
“The last and only time $ BTC saw monthly momentum reading that high, we saw a 38% pullback,” he wrote. However, the pullback gave way to “a recovery within the month and continued exponentially.”
Thus, Anderson said that the pushback was “an interesting thing to be on my guard for (interesting, but not actionable by itself).”
#BTC Monthly impulse reading
Something interesting so I’ll be on my guard (interesting, but not actionable on its own)
The last and only time $ BTC we saw monthly momentum reading so high we saw a 38% retracement and intra-month recovery and we continued exponentially pic.twitter.com/eAuzhVIjnb
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– Mr. Anderson (@ TrueCrypto28) December 31, 2020
“Step 1: Resist the Temptation to Buy Bitcoin at $ 32K”.
Prior to Bitcoin’s surge to over $ 25,000, Celsius CEO Alex Mashinsky predicted that Bitcoin will slide back to $ 16K before breaking above $ 26K. Of course, $ 26K is far off in the rearview mirror, but a pullback is still likely on the charts.
Additionally, Joaquim Matinero Tor, a cryptocurrency watcher and Blockchain associate at Roca Junyent, previously told Finance Magnates that he expects Bitcoin to drop below $ 18,000 before making a significant move up.
“I think the price of Bitcoin will fall below $ 18,000 and then it will rise again,” he said. “Investors in whales will sell once the financial year is over. So January can be a rollercoaster for the cryptocurrency market. “
However, it is difficult to know exactly how much Bitcoin will fall back. Ramp Capital noted on Twitter that “Bitcoin would have to drop 50% from here just to recover $ 16,500, the level reached on Thanksgiving 2020.”
Bitcoin would have to fall 50% from here just to recover $ 16,500, the level reached on Thanksgiving 2020
– Ramp Capital (@RampCapitalLLC) January 2, 2021
Still, some analysts are warning buyers that it may be best to wait for BTC to drop before jumping in. WVFRM host and video producer Marques Brownlee tweeted Sunday night: “Step 1: Resist the urge to buy Bitcoin at $ 32K.”
Step 1: Resist the Temptation to Buy Bitcoin at $ 32K
– Marques Brownlee (@MKBHD) January 3, 2021
What is the second step? “I’m sorry I didn’t buy Bitcoin sooner.“
However, those who did To be able to buy Bitcoin before you must be careful that the IRS is looking at your wallets.
Finance Magnates previously reported that in an article for Law360, Don Fort (who previously headed the IRS criminal investigation division) said that while the tax agency previously adopted a more “educational” attitude toward cryptocurrency hodlers, school days are over. : The time for “application” has come.
“The IRS has been positioning itself not so quietly for a smooth transition from education to law enforcement in 2021 and beyond,” he wrote. The article was co-authored by Lawrence Sannicandro, an attorney who has focused his career on federal and state tax controversies. Both men are part of the team at Kostelanetz & Fink, LLP.
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