Bitcoin broke out higher last week, initially falling a bit before finding support and smashing through the $50K level and rallying up to about $58K by the close of the weekly candle, officially claiming the all-important $1 trillion market cap level for the first time in Bitcoin's history as a single asset. This is monumentally bullish as Bitcoin continues to print higher highs, higher lows, and set new all-time records en route to prices most claimed we would never see before. But where does BTC go from here?
(February 21, 2021 8:30PM EST)
Outlook:
Bitcoin continued its rally, setting new highs in USD valuation and market cap. Bitcoin is now up nearly 100% YTD in 2021 with no signs of slowing down with many looking for a $100K price tag, and even some calling for much higher. There aren't any significant psychological resistance levels between Bitcoin today and $100K, so it'll really just be technical resistance levels, such as Fibonacci extensions and large, round numbers probably every $10K. Accordingly, I expect Bitcoin to now trade in $10,000 ranges, so currently $50K - $60K, which is Bitcoin's immediate target. Interestingly, this is also a curious potential inflection point for Bitcoin as we are trying to determine where Bitcoin's short-term W1 will terminate; I have tentatively forecasted ~$60K. This is by all means conjecture, however, I'm simply looking for Bitcoin to validate that view by getting rejected at $60K and pulling back to $50K to find support, or perhaps invalidate that view and continue rallying higher from here.
My crude Elliiott Wave count for Bitcoin on the weekly chart shows a possible $94,000 Wave 3 target for Bitcoin as early as late 2021. By that measure, based on the price action as shown above, we are well within the projection and en route to this projection, which should take some time to play out but may only accelerate as Bitcoin's market cap grows, thus enabling conservative institutions on the sidelines enough reason to finally submit a buy order. This also coincides with multiple other models, such as Plan B's Bitcoin Stock-to-Flow Model which plots a minimum $100K target that extends up to nearly $300K, as well as the logarithmic regression which projects a $115,000 - $140,000 Bitcoin price within the next year.
The Tesla news helped propelled Bitcoin to higher highs, however, this is simply another domino to fall in a long line of dominos as more traditional companies and institutions flip the script and look to take sizable initial positions in Bitcoin. While this is helpful, it only adds fuel to an already burgeoning fire fueled by programmatic and decreasing monetary supply, increasing demand, rampant fiat inflation, and a huge amount of Bitcoin remaining or being added to cold storage. Also last week we saw the following news:
Bitcoin breaks $1 trillion in Market Cap
Canadian Bitcoin ETF debut hits over $420 million AUM in 2 days
25% US investors own crypto
Bitcoin trading at 80% premium in Nigeria following national ban
MicroStrategy's CEO Michael Saylor raises $1.05B in latest Debt-for-Bitcoin Offering
The bigger Bitcoin gets the more legitimacy it gains = more institutional investors can justify taking initial positions, which would only add to the disproportionate demand vs supply.
Traditional Market Effects
In traditional markets, gold fell sharply lower recently as the US dollar was neutral to flat, interestingly showing another perhaps brief decoupling of the two assets from Bitcoin which has been unparalleled in its bullishness as of late. Typically, Bitcoin maintains a close negative covariance with the DXY, so we'll see if any price action this week corresponds with Bitcoin or gold for that matter.
Support:
Look for support around the $50K - $48K level, previous resistance-turned-support. Below that, $40K as a floor.
Resistance:
Immediate resistance at $60K, then $70K, $80K, etc.
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