Bitcoin prices surpassed $40,000 earlier today and have been fluctuating within range of that key, psychological level for the last several hours.
As the cryptocurrency trades close to the all-time high of more than $42,000 it reached earlier this month on CoinDesk, several market observers weighed in where it will likely go next.
Some of these individuals provided technical analysis, identifying key levels of support and resistance.
[Ed note: Investing in cryptocoins or tokens is highly speculative and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment.]
“$30,000 has proven to be a very strong support level for bitcoin, with consistent dip buying above that mark,” said Denis Vinokourov, head of research for London-based digital asset firm Bequant.
Alex Mashinsky, cofounder, chairman and CEO of Celsius Network, offered a similar perspective, stating that:
“It looks like we will be re-testing all-time highs on the upper side and the $30,000 support levels on the downside.”
Mashinsky added that “if we hit a lot of resistance at the $41k – $43k levels we may be moving sideways for a while.”
This sort of situation could very well materialize, as Chad Steinglass, head of trading at digital assets firm CrossTower, emphasized that “there is definitely some resistance at 40k.”
He singled out this price level as being one where some traders have “placed passive resting sell orders” since they want to take “some money off the table” and reduce risk.
After pointing to these transactions, Steinglass provided a bullish outlook.
“Market makers will lean on those orders, knowing they have a backstop, to trade around collecting bid-ask spreads below 40k.”
“We are probably going to bounce around here for a little while but the sound of the army marching forward is coming from just over the hill,” he added.
“Eventually, the buy interest from continued new inflows will overwhelm the last remaining sellers and the next leg will likely be higher,” said Steinglass.
“It could be hours or it could be days, but unless something significant happens to stem the flow of new money pouring in to the market, it will eventually happen.”
Garrick Hileman, head of research at Blockchain.com, also commented on the digital currency’s outlook.
He emphasized that in 2020, “crypto markets broke records and entered unchartered price territory.”
“We’ve since entered a volatile price discovery phase,” one where “traditional technical analysis tools, such as moving averages and bollinger bands, have been largely sidelined in favor of purely psychological metrics.”
“The market is currently thinking in round $10k increments,” he noted. While this may seem “arbitrary,” it “makes some sense given the massive price dislocations and volatility crypto continues to experience.”
He brought up a previous forecast, where he predicted bitcoin would reach a $1 trillion market value sometime this year, a milestone that would give individual units a price of roughly $53,000.
Interestingly enough, he maintained that bitcoin could reach the aforementioned price level this month.
Going forward, Hileman emphasized that market observers “should expect continued volatility until bitcoin settles into a new price range regime, which could be anywhere from $50k to as much as $400k per forecasts from institutional asset managers like Guggenheim.”
Disclosure: I own some bitcoin, bitcoin cash, litecoin, ether and EOS.