Posted 6 months ago | by @devadmin
Bitcoin could see an all-time high in three months, according to Bitazu Capital founding partner Mohit Sorout.
Sorout estimates that should Bitcoin hit a breakout, it will burst through its resistance rather than a decline. He suggests that should this happen, Bitcoin will be looking at $20,000 USD once more (the price of the cryptocurrency at the peak of its bull run in 2017) within just three months.
Calm before the storm.
— Mohit Sorout 📈 (@singhsoro) October 17, 2020
Sorout explained that this comes from observing Bitcoin’s volatility and current trends, noting:
“An observation based on how violent the rallies are after subdued periods of volatility. Could even be earlier.”
The stock-to-flow (S2F) model creator PlanB echoed the bullish sentiments, pointing towards a possible reason Bitcoin has been in the tight range recently. PlanB believes that a bull run is on the way if the charts are accurate.
❓Why does #bitcoin price not go up with all this institutional buying? Who is selling? BTC price is exactly where it should be, holding firm above $10K, waiting for that one moment .. asymmetrical returns .. patience! pic.twitter.com/pCyftmvHco
— PlanB (@100trillionUSD) October 16, 2020
Bitcoin has been in a tight bracket, ranging between $10,200 USD and $11,800 USD with minimal volatility. In fact, its record low volatility for 16 months, as Bitcoin Crypto reported.
This has caused instiutional investors besides Sorout to be bullish on Bitcoin for the long-term future.
Currently, Bitcoin (BTC) option open interest has increased to $2 billion, which is 13% below the all-time high. Although the open interest is still heavily concentrated on Deribit exchange, the Chicago Mercantile Exchange (CME) has also reached $300 million according to Trading View. Derivatives contracts allow investors to buy protection, either from the upside (call options) or downside (put options), Coindesk reported.
Lower volatility periods usually signal that substantial price movements are coming, both up and down. Institutional investors are betting on the upside, according to a Commitment of Traders (COT) report published by the U.S. Commodity Futures Trading Commission (CFTC) which stated for the week of Oct. 13th, —institutional investors increased long positions by over 9%. This makes the summation of bullish bets to the record high of 3,500 contracts reached in September.
Bitcoin remained above $10,000 earlier this month despite several bad news items including — the KuCoin exchange hack, U.S. regulators bringing criminal and civil charges against BitMEX, and more recently OKEx CEO arrested with the exchange under investigation.
This comes following Fidelity and JPMorgan both issuing separate reports praising Bitcoin. JPMorgan praised Jack Dorsey for Square’s investment in Bitcoin stating, it’s a “strong vote of confidence” for the cryptocurrency. However, JPMorgan later stated in another report syndicated by Bloomberg that Bitcoin was overvalued by 13% according to its estimates. In that article, JPMorgan strategists including Nikolaos Panigirtzoglou wrote in a note Tuesday about how they determined Bitcoin’s intrinsic value. The group noted, a drop in Bitcoin in September eliminated much “froth” but it remains about 13% higher than an estimate of intrinsic value, they said. JPMorgan strategists stated they found Bitcoin’s intrinsic value by treating Bitcoin as a commodity and looking at the marginal cost of production.
While Fidelity has bet on a “wave” of people investing in Bitcoin. Fidelity also added that Bitcoin could see its market cap surge to $2 trillion if certain conditions are met. As Bitboy Crypto reported earlier this week, the Fidelity report indicated that institutional interest could increase Bitcoin’s market capitalization by up to $1.3 trillion by capturing just 10% of investments from the alternative investments and fixed income market valued at $13.4 trillion.
That’s just one single market the potential redistribution of money could flow into Bitcoin. Fidelity also argues that Bitcoin could capture 1% of the bond market which is approximately worth $50.3 trillion. If Bitcoin were to capture 1% of the bond market that would put Bitcoin up another $500 billion in market cap.
Earlier this year, former hedge fund billionaire-turned crypto investor, Michael Novogratz, said he expected the Bitcoin price to hit $20,000 by the end of the year.
“The liquidity story isn’t going to go away. We’re going to get a big stimulus,” Novogratz, the founder and chief executive of bitcoin and crypto merchant bank Galaxy Digital, told CNBC, adding, “it doesn’t look like the Federal Reserve is going to raise rates.”
Is Sorout, Novogratz and PlanB corerct in stating that Bitcoin will raise to above $20K by the end of the year? Let us know what you think in the comments section below!
Bitcoin is currently trading at [FIAT: $11,700] UP +2.6% according to Coingecko at the time of this report.