Bitcoin Weekly Forecast: BTC/USD massive bull-run lingers – Grayscale report
- Bitcoin price is on the verge of a massive breakout according to the latest report by Grayscale.
- Peter Schiff says Bitcoin has failed to gain interest despite massive pumping, unlike gold.
- New Tether issuance could be dampening fiat-driven Bitcoin surge as per Chainalysis’ Phillip Gradwell.
After rallying remarkably above $12,000 and trading new 2020 highs at $12,500, Bitcoin plummeted to confirm support at $11,600. Investors waiting to buy low started to increase their positions leading to a gradual recovery. Recovery has, however, been limited under $12,000 with $11,900 limiting most of the price actions to the north. BTC/USD is dancing at $11,830 while holding firmly to the support at $11,800.
Market Overview: Grayscale believes Bitcoin is on the verge of another breakout
Grayscale Investments, a fund manager company based in New York is confident that Bitcoin could soon enter into another bull-run. As discussed in the cryptocurrency market news, Grayscale says that the current technical and fundamental structure of Bitcoin resembles the one in 2016 before Bitcoin entered into the parabolic rally in 2017.
The report also discusses the fact that inflation is rising across the world especially now that governments are employing monetary policies to cushion their economies against the COVID-19 shocks. The demand for Bitcoin is set to rise significantly as inflation hits higher levels. Investors will be forced to seek alternative investments and due to the scarcity nature of Bitcoin, it would be a viable asset.
Grayscale, using on-chain analysis said that investors are choosing to hold Bitcoin for the long term even during the lowest dips. Moreover, the number of daily active address has continued to grow and is now at levels not seen since the peak in 2017 when Bitcoin traded at $20,000.
Related reading: Cryptocurrency Market News: OMG Network spikes 100% in 24 hours as Bitcoin stalls under $12,000
Peter Schiff: Interest in Bitcoin is still below 2019
Bitcoin has rallied significantly since the crash in March when it traded around $3,800. However, Peter Schiff, a gold bull and a Bitcoin critic says that in spite of the efforts made to pump the price by proponents, “interest is still below its 2019 peak.” In comparison to gold, Schiff says that interest in the precious metal “is hitting new highs.”
Schiff highlighted the interest in the two assets using Google Trends, a Google website that measures the popularity of search engine queries. The chart below shows search interest in gold has hit new highs while Bitcoin is still under its 2019 peak and not anywhere near the level in 2017.
Industry Overview: Tether and its implications on Bitcoin price
The largest stablecoin Tether (USDT) has been on a printing spree for the better part of 2020. Analysis platform, Chainalysis claims that the new issuance of USDT has the ability to delay or even dampen BTC rally. Chainalysis chief economist, Phillip Gradwell made the comments in a recent Weekly Market Intel newsletter.
“Newly issued Tether arriving at exchanges can be used to buy Bitcoin just as much as existing Tether can be. But making this distinction shows that in the current market, fiat would be driving Bitcoin buying to an even greater extent if there had not been new Tether issuance arriving at exchanges, shown by the difference between the yellow and pink lines.”
According to Gradwell, the surge Bitcoin experienced in the last two months is mainly driven by fiat money entering into crypto. However, USDT coming into the market is reducing fiat demand.
Bitcoin technical analysis
Bitcoin price is likely to close the week’s trading below $12,000. From a technical perspective, Bitcoin is entering into a period of consolidation likely to continue into the weekend session. This sideways trend is illustrated by the RSI and the MACD. The latter clings to the mean line (0.00) while the former is holding the ground at 50 (midline).
Marginally below the market value is the first supported at $11,800; aided by the 50 SMA. Other lower buyer congestion areas include $11,600, $11,200 as well as $11,000.
On the upside, a descending trendline is limiting the bullish movements. A break above this trendline resistance could have the potential to reclaim the ground above $12,000. However, it is vital to wait for a confirmed breakout as it would help gauge the ability of Bitcoin to approach $13,000.
Read more: Bitcoin Price Prediction: BTC/USD making a persuasive move back to $12,000 – Confluence Detector
