Bloomberg recently covered Bitcoin price outlook and argued price predictions based on various fundamentals. When taking a macro approach, Bloomberg believes Bitcoin can reach $20,000 levels in 2020. What fundamentals is Bloomberg looking at, and what do we believe must happen?
Bitcoins Price
At the time of this reporting, Bitcoin is trading around $9,800. On a year to date basis, Bitcoin has returned nearly +36%. As outlined in last week’s market report by Visionary Financial, Bitcoin is outperforming traditional markets. In addition, Bitcoin is outperforming all of the largest U.S sectors on a year to date basis. As Bitcoin continues to build momentum post halving, Bloomberg is setting its end of year predictions. According to a June 2020 market report, Bloomberg believes Bitcoins price will test $20,000 by the end of 2020. With Bitcoin currently trading around $9,800, this means that Bloomberg sees +104% growth in the next 7 months. From a macro perspective, Bloomberg was following various fundamentals.
Top Bitcoin Fundamentals Bloomberg Is Watching
Bitcoins Volatility: Bloomberg argues that Bitcoin is moving towards a digital equivalent to gold. This is argued by comparing Bitcoin to oil markets. During financial turmoil, Bitcoin has printed the lowest volatility to oil ever. As mentioned in a previous report, Bitcoin also had lower volatility than emerging currencies on the 1 year scale. Bloomberg believes that lower volatility is a sign of further adoption. With fixed supply, higher demand is expected to drive prices north.
Grayscale Investments: Bloomberg has been following the Grayscale Bitcoin trust as of recent. They believe that the narrowing premiums of GBTC is a sign of Bitcoin maturation. Grayscale has accumulated 25% of newly created BTC this year compared to 10% in 2019. The firm believes this is resulting from “dip buyers” and positive outlooks. Visionary Financial also reported that institutional investment has skyrocketed this year at Grayscale, being driven by hedge funds.
Bitcoin Futures: The firm believes that Bitcoin futures can explain sentiment outlook. Bloomberg argues that rising BTC prices could come to fruition due to open interest in Bitcoin futures doubling since 2019
In addition, Bloomberg takes a look at hash rate, transactions, on-chain metrics, stablecoins, and other fundamentals.
What We Believe Needs To Happen To Hit $20,000
Despite Bloomberg focusing on institutional investment through futures and Grayscale, we believe these areas to be less relevant. Just like Bitcoin originally reaching $20,000 levels without institutional investors, we believe it can happen again with primarily retail investors. Despite a historic recovery for the stock market since March, retail investors are still looking for ways to diversify. Many investors have confusion on market momentum right now. Stocks have surged as economic data has essentially gotten worse. Aside from companies failing to provide financial outlooks, we also have 42 million people experiencing some form of unemployment. With the Federal Reserve injecting trillions of dollars, many investors argue that “hyperinflation” could be the end result. In terms of the Fed’s balance sheet, there’s so many unanswered questions in traditional markets. After the 3rd halving, retail is starting to learn the fundamentals behind Bitcoin. In the event of inflation, BTC has the chance to be the ultimate “inflation hedge.” It’s making more and more sense to further diversify in Bitcoin.
Bitcoin Technical Analysis
In terms of hitting $20,000 by the end of this year, we continue to focus on technicals opposed to fundamentals for the next 7 months. In recent Bitcoin Technical Analysis, we outlined that Bitcoin was targeting $10,500 in the short term. As of right now, the $9,050 still represents strong support. In addition, we are watching to see if Bitcoin can stay above the 25 day moving average ( red line ). As of now, it’s holding it relatively well. As long as BTC can hold the 25 day moving average, we see a scenario where $10,500 is tested in the short term. If that were to happen, $12,200 would be the next resistance to conquer in the journey to $20K.
We also keep our eyes on the RSI, which assesses oversold and overbought territories. Right now, Bitcoins RSI is getting a bit high, but it seems to be following the same pattern from the January 2020 bull run. We outlined both scenarios on the chart to further explain what we’re discussing. We will want to make sure RSI does not fall below the support level we have outlined. If so, you could see a similar sell-off to the price action in Feb after rejecting RSI support.
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