Bitcoin forecast 2021, should I invest?
Bitcoin is nearing the end of the year near its lowest level in several months. However, there are good reasons to expect that the price of bitcoin will begin to recover from a low level of about $ 5,000 to $ 6,000 and rise during 2020 to end the year between $ 15,000 and $ 17,000. 2021 is likely to see Bitcoin reach $ 30,000 in a similar move but slower than the strong price increase of 2017.
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Recent years have seen investors and traders worried about the price forecast for bitcoin, as the price of the digital asset has been very unstable and very difficult to predict. A year after the market slumped in 2018, Bitcoin made a few bullish trends in 2019, followed by a bearish move. In an attempt to predict the price of Bitcoin using technical and fundamental analysis, I will take full advantage of the recurring nature of historical Bitcoin patterns, which mostly `reflect impending events and buyers' behavior, in order to forecast Bitcoin prices for 2020.
Bitcoin in 2019
In June 2019, Bitcoin hit its highest annual level after hitting nearly $ 14,000. Due to its inability to breach its resistance point, Bitcoin fell in a free fall, as the high price-driven currency beat buyers' buying power. The bitcoin price drop is protected by a support point created by buyers' response to the price drop, keeping the price above about $ 10,000 through September, when the price started falling to levels less than four numbers, where it remained there. My expectations for bitcoin during 2020 are positive, but 2021 will be more positive.
Bitcoin technical analysis: short and medium term
Before moving forward, it is important to say that the price of bitcoin will fall further in the short term, as the main support line has been breached recently, and unless the price is fixed through buyers focusing more on the price curve, the price may touch approximately $ 6500 in the range. Short in the event of a breach of the support line at $ 7000, and then rebound to the price area of $ 7500 and $ 8,000 and then returned to above $ 10,000 in the medium term. After that, I expect the price to hold for a while before continuing to break above its all-time high in 2021, after the Bitcoin Half Tier event in 2020 which will happen in May 2020. The reasons for these forecasts will be explained below.
On the above price chart, Bitcoin found a key support point at $ 10100 after it got a strong drop from its annual high. On August 22, 2019, the price reached a support point at $ 10,000 after failing to break through the resistance at $ 10,300. Then the price dropped to settle at $ 10100 again on August 25, moved slightly above its resistance point and held it at the support point again on August 28. At this point, supply overcame demand, causing Bitcoin to breach its support point, reaching as low as $ 9,400 on August 29. At this price, buyers bought more assets, pushing the price up from the previous point of trading around $ 10800 on September 6, 2019. Bitcoin found another major support point at $ 7800 on September 30, October 7, and October 24 as it struggles to surpass its 8,300 resistance price Dollars. Then bitcoin rose sharply to breach this resistance, as it was trading at $ 9,600 on October 28, 2019, and between then and November 8, 2019, I found a support point at $ 9200. This support point was breached, and the full number was broken at $ 8,000. The price continued to decline, and at the time of writing, the lowest level for 2019 had been recorded earlier in the week, just above $ 6500.
Interpretation of the analysis is short/medium-term
Bitcoin price movement seems to be following an expected trend during the past three months. The price touches the support line four times in a row, penetrates it, and takes a deep drop before rebounding above or below the previous support line. In most cases, a typical chart analysis fails because it ignores the real interaction that takes place in the market. I think Bitcoin will decrease in the short term, but will Bitcoin increase again in 2020? I think the answer is yes.
Bitcoin will decline in the short term
It is always impossible to predict the price of bitcoin without looking at the price determinants. Over the years, the price of bitcoin has been affected by a number of specific factors, as the main known factors are government control, and the expectation of a future increase or decrease in prices due to an imminent event in demand and supply, most of which are affected by some determinants, and media speculation. One of the most dangerous determinants is government control, as this appears to affect all other factors including media outlook, demand, and supply.
In 2018, after Bitcoin hit an all-time high, the Chinese government launched a crackdown on cryptocurrency exchanges, causing speculation of lower prices in the media, and in return, forcing buyers to leave the market. This greatly affected the price and depreciated it to nearly $ 3,000.
Before the end of 2019, the price of bitcoin will drop below $ 6500, due to another campaign launched by China, unless there is a stronger determinant such as the bullish speculation surrounding the half-value of Bitcoin 2020 to reinforce this fear.
Bitcoin price chart (September - November 2019)
The price chart indicates that there is a potential upward movement in the first quarter of 2020, after finding support somewhere between $ 5,000 and $ 6,000. The blue line represents the market cap, while the green line represents the price.
The price chart shows that Bitcoin forms an exciting pattern that looks like a "cup and handles" characterized by a sharp drop in prices, followed by consolidation and then a bullish rally after that. The handle indicating a slight or sharp drop in the correct range of formation is clearly forming and is supposed to be followed by an uptrend over the coming months in the first part of 2020. The upward movement may cross the highest rally in the past 3 months near $ 10,000. It should be noted that this formation may take about 6 months or more to complete, so the descending movement will need to be patient. In the short term, bitcoin is likely to continue its downward momentum to reach $ 6000 or even $ 5,000 quickly, and possibly even before the beginning of 2020. However, the future of bitcoin appears bright in the long run. Is bitcoin a good investment? Bitcoin is always a good investment and buying it at a relatively low current price is your best decision.
Long-term bullish outlook (2020-2021)
Predicting the future of bitcoin using charts and patterns can be a promising way to succeed as it is in bitcoin trading. However, technical analysis in this extraordinary asset can be overcome with an event that carries a lot of strength and can cause a strong change in demand. In May 2020, Bitcoin is conducting a retail event traditionally known for its positive impact on the market. Bitcoin half is to split the block mining reward by half, which makes mining more expensive. This leads to a decrease in supply in relation to the increase in demand, which makes sense to lead to higher prices.
Like strong advances during 2017 for bitcoin, the price fell several times within a few months or a year before the event. The price remained low for a while before the sharp rise as shown in the above chart.
Based on previous price data, bitcoin is about to supply its first upward advance before the event in 2020, and this may begin sometime in late December 2019 or early January 2020. Bitcoin price should slowly rise again to a price zone around 10,000 Dollars by March 2020 and perhaps circulate around 13,000 dollars by May 2020 as high prices during this period must be prepared gradually.
Conclusion: Bitcoin price prediction 2020
Bitcoin increased from $ 12 in November 2012 to $ 110 on July 8, 2013. The effect of Bitcoin half-way was effective immediately after the event, which led to a 1000% price increase in just seven months. Likewise, the price of bitcoin after the second-half event rose significantly from $ 650 during the event to about $ 772 in December 2016, i.e. 5 months after the event, and $ 907 in January 2017, i.e. 6 months after the event.
It should be noted that the percentage change in price during and after the event may not necessarily be the same as the percentage change in price according to several factors in addition to the present value of the asset. The 2012 event led to a massive change in prices compared to the 2016 event, and the 2020 event may cause a lower change in price compared to the 2016 event. I expect Bitcoin's price may not exceed its highest level ever in 2020. The price may go up but at a slower pace like the price movement A few months after the event in 2016. By December 2020, bitcoin may reach $ 17,000, and a decrease of $ 15,000 when we study price action after the first 6 months of the event. In 2021, Bitcoin could trade above its all-time high and push close to the $ 30,000 level.