Bitcoin Bull Run Will this Stop Anytime soon?

Pramod Dhakal
December 2, 2020

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Recently we have seen an unprecedented rise in bitcoin price or somewhat referred to as Bitcoin Bull Run. What are some of the factors that are contributing to the rise in price? The price of Bitcoin in 2021 how would that look like? When is it okay to sell the bitcoin in 2021? In order to know the right answer, we took the opinion of many experts in the business.

To start with the single quantifiable factor that contributes to the rise in the price of anything – whether it’s Bitcoin, another cryptocurrency, or something as traditional as a commodity – is the supply and demand curve. Because there is a finite amount of bitcoins and its supply curve can be viewed as constant, whenever demand rises, the price does as well.

So what causes the equilibrium of the Demand Vs Supply curve to shift?

Reasons For Bitcoin Bull Run

1. Growing Interests By Large Players

Back in 2017, Bitcoin’s run to all time highs was driven primarily by over-exuberant retail sentiment. Things are decidedly different this time around, with the current bitcoin bull run driven by larger players who have recently taken an interest in Bitcoin as a store of value. Institutional interest began swirling this fall when public company MicroStrategy announced that they had added Bitcoin to their balance sheet. However, Bitcoin’s current bull run took off immediately following PayPal’s announcement that they would be adding cryptocurrency as a payment option for millions of vendors, in addition to enabling users to buy and sell the cryptoasset.

2. COVID19 Pandemic and Weakening Global Economy

Touching briefly on the unfortunate situation the world has suffered this year, the coronavirus crisis had the knock-on effect of causing a long-awaited financial crash in March. This resulted in Government bailouts: the U.S. FED printing $3 trillion (plus another $2 trillion on the way), the Bank of England likely printing towards £1 trillion and many more around the world following suit. Not to forget the introduction of negative interest rates which look to become the norm. Although this may be necessary in their eyes to stimulate the economy and it’s future protection, this comes with a huge risk of inflation on a scale unseen in these territories before.

Corporate investment and pandemic stimulus adoption are the major drivers for the BTC/USD rally this time. At this point, Bitcoin is set to benefit from USD weakness due to increased dollar liquidity, which is bound to end up in the previously favorite types of assets – equities, luxury real estate – as well as in the less traditional ones – cryptocurrencies.

Bitcoin currently is benefiting not only (and not mainly) as a haven for market participants but as a previously largely overlooked (by institutional investors) asset. Both the US Treasury and Federal Reserve are expected to continue providing some form of relief at least until spring/summer 2021.

Future Price Predictions of Bitcoin

Bitcoin’s current rally is more stable and ultimately less volatile than the previous bitcoin bull run because it was initiated by genuine institutional interest, not retail-driven market exuberance. Buying pressure has been building over the past month, pushing Bitcoin to three-year highs, and soon all-time highs should the momentum keep up.

By 2021, the price of Bitcoin will depend on how the pandemic will be affecting the global economy and how the US and EU governments will react to it. The Bitcoin bull run may continue well into 2021 if enough liquidity is added to the global markets.

Although the incoming US president is expected to increase taxes to curb the budget deficit at least slightly, it is unlikely that fiscal tightening will happen while the US economic output is still well below its potential level.

My conservative target for BTC/USD is at $25k by the end of the first half of 2021 if the current status quo persists. From that point, things get extremely unpredictable.
Andriy Moraru

If Joe Biden or Jerome Powell push some austerity or tightening buttons (fiscal or monetary), BTC/USD will likely plunge and may even go well below $20k, at least temporarily. If the current loose conditions (low-interest rates, largely unchecked budget deficit) remain unchanged into the second half of 2021, my conservative target is for BTC/USD to appreciate to $30-40k by the end of the year. With no hints of tightening and with some additional economy-supporting measures, BTC/USD is likely to surpass $50k. Even under the most favorable conditions, the Bitcoin rally won’t progress without corrections, so there will be plenty of opportunities to sell Bitcoin in 2021.

Any huge anti-pandemic news (like daily cases steadily declining), hints at no-stimulus sentiment in the US government, hints of worry with the potential inflation from the Fed, or any anti-Bitcoin legislature news can all hit BTC/USD hard, driving a major correction. BTC/USD is also notable for the psychological round levels to hold significant weight among traders – it is not uncommon to see an immediate pullback following the conquest of the next big level, so selling into big round levels (e.g., each thousand USD) once the rally gets tired is a viable strategy. Finally, taking profit with a long-term horizon will be justified once some form of financial tightening is announced.

Bitcoin's price movements are something that will likely occur for the next 12-18 months. There is a lot of uncertainty on what is going on in the economic space, therefore as uncertainty increases, Bitcoin will seem as a solution that will help us stabilize the way we use money as banks will go bankrupt. I believe that Bitcoin has a lot more to offer and we could see another rise to its highest peak that happened 2 years ago at $20,000. It' something to keep in mind and possibly invest in whilst prices fluctuate.
Maciej Glowacki

I would hold bitcoin for the next few months. The price could rise to 25,000 USD in 2021. But I would sell if the price reaches 30,000 USD. Predicting the price of bitcoin is a dicey game! Just after I responded the first time, bitcoin did a dive. The US treasury secretary said some new regulations might be implemented during this lame duck government. Bitcoin price is clawing its way back towards $18,000 Don't try to predict short term fluctuations. Long term it will go up because of its design to make fewer new coins each time, the reward halves. But short term the whales manipulate it. Like the recent plunge. To shake up the newbies.
John C. Edmunds

This year in May we published an article during the time of Bitcoin Halving with a bold prediction that bitcoin price to reach about $20,000 by the end of 2020. The prediction has largely been true with the current bitcoin bull run. We are anticipating a similar kind of bitcoin price for the year 2021.

Credits:

John C. Edmunds: Johncedmunds.com You can also visit his Wikipedia page

Danny Scott: CoinCorner

Clara Medalie: Kaiko

Caleb Chen: Privateinternetaccess

Andriy Moraru: Earnforex

Maciej Glowacki: Let me bank

Pramod Dhakal

Pramod Dhakal is a Tech entrepreneur at heart, a natural leader, an Agile practitioner, and a Digital Transformation provoker. He has spent over a decade implementing various large-scale transformation initiatives in large multinational organizations. He is an author and contributor at Hitechies largely in the technology space. Pramod is an active investor in cryptocurrencies and he is extremely positive about the future of the decentralized digital economy.

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