Bitcoin (BTC), a long-standing fractal, has the potential for its price to rise to between $250,000 to $350,000 by 2021.
Bit Harington, a pseudonymous analyst, first noticed the bullish setup. It was inspired by Bitcoin’s secular bull run every time the miner block reward is cut in half. Analysts see the halving of BTC as a bullish event that reduced the supply.
Harington reminded us that Bitcoin’s price surged by over 600% following the two halves in 2012 and 2016, when we measured it from the resistance/support (R/S), line as shown in this chart.
Bitcoin price performance following the second halving event. Source: BuyBitcoinWorldWide and PlanB. Bit Harington
This line was a barrier during the price uptrend. It was repeatedly tested by traders before it was finally broken to set a new record. Prices eventually reached a similar level when they began to correct.
Bitcoin saw a similar upward trajectory in 2020-2021. It rose from $4,000 to $60,000. Harington again referred to the $60,000 level as the R/S line that prevented trades from making a clear bullish breakout.
BTW: This perspective shows that there is a “Bitcoin double-top” after each halving. This double top was not obvious after halving 2, but it can be seen in many indicators. Weekly RSI for example:https://t.co/lopvWPqd3v
— Bit Harington (@bitharington), September 19, 2021
Analysts suggested that Bitcoin could surpass it and soar to a new record-setting price.
Michael van de Poppe, Cointelegraph Markets analyst, reacted to Harington’s fractal theory and said that it would bring Bitcoin prices up to $250,000-350,000.
However, he noted that the huge run-up could also trigger a severe correction that can push Bitcoin prices to $65,000, which is right at the Harington S/R level, $60,000.
This is a great idea and aligns with my ideas. We are somewhere in 2017. A heavy breakout will occur at a later stage, to $250-355K, and then landing on $65K during the bear market for #Bitcoin. https://t.co/4XX7aDp2rs
— Michael van de Poppe (@CryptoMichNL) September 19, 2021
Are fundamentals consistent?
After falling below $4,000 in March 2020, Bitcoin soared mainly due to loose monetary policies by global central banks to limit the economic effects of the Covid-19 pandemic. As institutional and retail investors began to recognize the safe-haven nature of Bitcoin against falling U.S. dollars and rising inflation concerns, the cryptocurrency closed the year around $30,000
Bitcoin’s price reached $65,000 in 2021 before falling below $50,000. The Coinbase exchange listed the pair at $29,301, its lowest price for the year (YTD). The sudden ban on crypto activities in China (including mining), and Elon Musk’s alarming tweets about Bitcoin’s growing carbon footprints led to the pair’s losses.
The history of Bitcoin prices. Source: TradingView.com
BTC balance drops to new lows on exchanges
As its reserves dropped dramatically, the cryptocurrency’s prices remained above $30,000 despite having a high price.
CryptoQuant, a blockchain data analytics company, reported that Bitcoin’s balances across all crypto trading platforms fell to 2.37 million BTC last Week. This is the lowest Bitcoin has been in over a year.
All exchanges have Bitcoin reserves. Source: CryptoQuant
A drop in Bitcoin reserves is a sign that traders intend to keep the cryptocurrency and not trade it for altcoins or fiat currencies.
The Bitcoin hashrate is almost back to normal
Bitcoin’s rise from below $30,000 down to nearly $50,000 coincided with its V-shaped havehrate recovery.
Related: BTC price drops back to $47K after a weekly close closely tracks Bitcoin futures gap
The Bitcoin network’s computation power plummeted to 84.79million terahashes per seconds (TH/s), in July, from 180.66 millions TH/s in May. As many miners responded in kind to China’s crackdown on crypto, the drop was apparent.
The average seven-day Bitcoin hashrate in recent times. Source: Blockchain.com
The network has recovered more than half its lost hashrate and reached 136.92M TH/s on September 18, which indicates that China’s ban on direct mining was not a lasting one.
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Eileen Wilson –Technology and Energy
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