"Buckle your seatbelts." 2 arguments in favor of a sharp rise in the price of bitcoin

Now the cryptocurrency is in the same position as before the rally of 2012 and 2016. Then BTC went up by 6000%, then by another 2000%. Is it to wait for the beginning of a new phase of the coin's rate rise and what may, on the contrary, bring it down

Bitcoin is on the cusp of a new rally, according to analyst Charles Edwards. On his Twitter account, he posted a graph of the coin, on which he noted that its price was in line of the global downtrend. The cryptocurrency was in the same position in November 2012, when the first halving happened in its network. A month after that, the BTC rate began to increase and in 2014 set a maximum of just above $1000. The growth during this period was more than 6000%.

The current situation also duplicates 2016. In July, there was a second halving of bitcoin. The price at that time also came close to the downtrend line. In December, it broke through the resistance and entered a new phase of growth. A year after that, bitcoin set its historical high of $20,000, rising by more than 2000% during this period. Two months have passed since the last halving, it took place in May.

This pattern cannot be interpreted unequivocally, according to Denis Voskvitsov, head of Fintech-compromising. In his opinion, too much time has passed between BTC halvings to boldly extrapolate data - in each case their individual factors were triggered. In 2013, the cryptocurrency market was dominated by bitcoin, and other coins took their first steps. In 2017, the situation changed, it was the year of the triumph of the altcoins.

"Now there are several new factors in the crypto market: the inflow of institutional capital, the legalization of a whole set of crypto-derivatives, and the "anti-crisis" experience of spring 2020, and the huge growth of the money supply of the world's leading currencies. Some of these factors are working in favor of the growth of the crypto market, although others may hold back growth. In particular, institutional investors who have not yet invested in cryptocurrency can expect another collapse for successful entry into the market," Voskwitzov added.

He noted that at the same time some investors tend to believe in repeating past rallies. It is not known whether the bitcoin exchange rate will be able to move back into the long-term growth phase. However, the belief in this among market participants creates additional bullish moods. Perhaps in 2021, most institutional players will invest in cryptocurrency and will be interested solely in the growth of its value.

Vladislav Antonov, an analyst at Alpari, also stressed that the situation at the moment is highly accountable from what happened after the previous halvings. There was no coronavirus or trade war between the U.S. and China during the 2017 rally. Therefore, the price of bitcoin was growing. However, since then the situation in the world has changed, derivatives have spread to cryptocurrency, and "advanced" traders have come to the market.

"The effect of halving no longer works. When bitcoin was more expensive before and after the previous halvings, there were no bitcoin futures. And now the volume on the futures market exceeds the spot at least 10 times. The crypto market has become part of trading and hedge strategies that are used in traditional markets, so what worked well before is no longer working," Antonov explained.

He specified that the daily chart of bitcoin speaks in favor of growth. However, the price of the coin, like many other assets, now repeats the movements of the index of the S'amp;P 500. It in turn depends on the situation in the world with the covid-19 coronavirus pandemic. Therefore, before talking about the rise in the price of cryptocurrency, first you need to solve the problem with a new disease, as well as improve the scalability of the BTC network. It can only conduct 4-7 transactions per second, which is not enough for a large number of users. For example, the Visa payment system is able to make more than 24,000. operations per second.

Another argument

Josh Ranger, an analyst and founder of Bloskroots, suggested that the bitcoin exchange rate will soon be moving, as he wrote on his Twitter account. However, it is not known in which direction it will take place. The reason for the volatility: this indicator, which characterizes fluctuations in the price of the asset, fell to 40 points. The last time it was at the same low value was in February. In the three weeks since, BTC quotes have fallen from $10,500 to $3800.

Another time, the volatility of the first cryptocurrency rate fell in November 2018. This was followed by a reduction in the price of the asset from $6,000 to $3200, which took two weeks. Another example is March 2019. A week after the volatility decreased to 20 points, the bitcoin rally began. Within 7 days it rose by more than 30%, and two months later - almost 250%.

"The volatility of bitcoin is approaching 40. This year, the slowdown in volatility has led to a significant price change of 30-60% in the next few weeks. From the current - it is either a rise to $12,200, or a drop to $6500. Fasten your seatbelts," Ranger wrote.

Voskwitzov agreed that the volatility of BTC at the moment is extremely low. Based on past experience, sudden movements cannot be ruled out. If the price falls, it will probably recover quickly - institutional investors use the fall to enter the market. At the same time, rapid appreciation may prove to be a stepping stone to long-term growth. However, the factors in favor of the new hype have not yet consolidated.

The decline in volatility indicates that the market is in the accumulation phase, Antonov added. In other words, market participants are accumulating positions. Sellers build up short positions, buyers - long positions. On this basis it is impossible to conclude in what direction the price will go, it can both soar and collapse.

On July 6, analyst Yashu Gola warned of a possible decline in the bitcoin rate. There is a high correlation between coin quotes and the index of the S'amp;P 500. In July, companies publish second-quarter reporting. The figures are likely to be poor, as they will include three crisis months. This may affect the share price, hence the value of the index of the S'amp;P 500. If it falls, it is likely that the BTC rate will show similar dynamics.