After an 11% drop last week, Bitcoin (BTC) started to mount an extremely strong recovery on Sunday and Monday, despite bearish price action in the U.S. stock market, with buyers stepping in after letting the price of the leading cryptocurrency trail off towards the low-$8,000s.
As of the time of writing this article, BTC is trading for $9,155 — up around 5% in the past 24 hours, per data from Blockonomi.
The cryptocurrency remains slightly short of the $9,190 high it put in on January 18th.
Bitcoin Ready to Surge Even Higher, Analysts Predict
Although Bitcoin is already up over 10% in the past four days, analysts say that more upside is likely for the leading cryptocurrency.
Raoul Pal — a former Goldman Sachs executive and the current chief executive of financial news outlet RealVision — noted in a recent tweet that BTC’s latest price move higher has allowed it to break out of a bullish “inverse head and shoulder formation.”
He added that the formation should make for a powerful breakout. While he didn’t give an exact price prediction with the below chart in mind, Pal is notably a long-term believer in Bitcoin, seeing it as a bet on the future financial system that will most likely be predicated on digital assets.
Bitcoin is breaking out of an inverse head and shoulder formation (with a very weak right should which make it often more powerful). It already broke the big wedge pattern. #bitcoin $BTC pic.twitter.com/v7XLtK2uac
— Raoul Pal (@RaoulGMI) January 28, 2020
Pal isn’t the only industry commentator that has expressed bullish sentiment over the past few days.
Filb Filb — a pseudonymous yet eerily accurate trader who in October 2019 called Bitcoin’s rapid 40% surge towards $10,000 then the subsequent move to tumble to the $6,000s — wrote in a recent TradingView analysis:
“Overall, Bitcoin is exactly where [I] anticipated; slowly grinding up towards previous resistance… I’m very much of the opinion that Bitcoin will reach to at least $12,500 level before the halving.”
As to why $12,500 makes sense, he noted that that is the “top target” for a bullish inverse head and shoulders chart that is forming on a medium-term basis for Bitcoin, and is seemingly the one Pal pointed out in his chart.
Another accurate analyst, Dave the Wave, who in the middle of 2019 said that Bitcoin was going to fall to the mid-$6,000s, on the weekend gave four reasons why he thinks the cryptocurrency remains in a long-term uptrend:
- In the past 12 months, since the end of January of 2019, the price of the leading cryptocurrency has surged by 160% — this is a performance that effectively outpaces all other crypto assets, stocks, and commodities.
- BTC has seen a “solid retracement as long as the parabolic spike up, which has held the 0.5 Fibonacci Retracement of the entire move, suggesting bulls remain in control.
- Bitcoin has just broken “out of a long downward trend line.”
- Prices have recently posted a higher high.
Bit surprised at the amount of bearish sentiment I'm seeing on CT [not really as a contrarian]. A recap of this year –
– price up 160%
– solid retracement as long as the parabolic spike up
– break out of the long downward trend line
– higher high
– looking for higher low pic.twitter.com/Gev1iaAi6N
— dave the wave (@davthewave) January 26, 2020
Fundamentals Back Bullish Sentiment
The fundamentals purportedly back this lofty sentiment that prices are on the verge of rallying higher.
Per previous reports from Blockonomi, Tom Lee — co-founder of New York market research firm Fundstrat Global Advisors — recently gave a number of reasons why his firm is bullish on Bitcoin during an episode of CNBC’s “Fast Money” segment:
- The upcoming 2020 Presidential Election in the US, which he claims will decrease regulatory pressure on Bitcoin
- The upcoming Bitcoin block reward reduction, known as a “halving,” that will decrease the inflation rate of the asset by 50%;
- The rising geopolitical tensions, especially in Iran.
Lee added that his company has been seeing an increasing interest in cryptocurrency-related material from his clients, suggesting an institutional interest in digital assets.