The Bitcoin price (BTC) has crossed the resistance level of $21,000-$22,000 to climb past a record peak of $23,000 on Dec. 17.
As the demand for the digital currency hits an all-time peak, the end of 2020 has been illuminating crypto-centric subreddits and streams of Bitcoin hodlers.
Bullish Institutional Acceptance
Via the acceptance of the network by PayPal, the Bitcoin explosion was intensified, along with the long-sought seal of approval by revered personalities such as Michael Saylor, Jack Dorsey, and Paul Tudor Jones.
The related market appreciation and mainstream recognition of celebrities such as rapper Logic and MassMutual’s new institutional buy-in continue to raise the price and sentiment of Bitcoin (BTC).
As the work-from-home dynamic fuels digital disruption, the tide begins to escalate and it increasingly seems that 2021 will be an action-packed year for the next step of the Bitcoin network’s development.
Especially significant for Bitcoin to begin its rally in the near term was the $21,000 mark. Exchange heatmaps reported stacked sale orders at about $21,000 to $21,500, which indicated that to see a larger uptrend, BTC price had to crack through.
Order Book Patterns
Exchange order books and volume patterns also reveal that sellers have raised their sale orders, anticipating Bitcoin to climb to $30,000 since yesterday’s $20,000 was finally broken.
The risk of BTC reaching $30,000 as the first local peak remains strong if the strength of the futures, options, and spot markets is maintained over the coming days.
However, one challenge to Bitcoin in the near future is the proliferation of whales. CryptoQuant data shows that whale trade deposits have grown to amounts unheard since March 2020.
The market cap of Bitcoin has crossed $403 billion with the price movement, surpassing Johnson & Johnson as the 13th largest commodity by market cap. It is almost as valuable as Walmart and has a $411 billion market share.
A Warning from Coinbase
Despite this excitement, Coinbase CEO Brain Armstrong has warned about the market volatility of crypto.
“Like all asset classes, crypto markets will rise and fall over time. And, as we witnessed in 2017, we’ll occasionally see strong market rallies where prices will rise quickly and aggressively.
While we’re always excited to see increased interest in crypto, it’s also important to point out that this is not only a time of high volumes, but also price volatility.We believe that crypto is a truly game-changing innovation and, at Coinbase, we take a long-term view of the market. While it’s great to see market rallies and see news organizations turn attention to this emerging asset class in a new way, we cannot emphasize enough how important it is to understand that investing in crypto is not without risk.For one, crypto can be a volatile asset class — often more so than the types of traditional financial instruments that most investors are used to.For example, this means that the market can move in either direction much faster than equity markets.And while we offer a full range of trading tools for traders to take advantage of market conditions, we likewise caution investors who may be focusing on short-term speculation and encourage customers to seek out resources and consult financial advisors to better understand the risks associated with investing in cryptocurrencies.For those who believe in the potential of crypto, we also all have to believe that we’re still in the very early stages and that there’s a lot more to come.”