Source: Yahoo Finance
BTC/USD had a rather tumultuous run on the first Monday of 2021, as it experienced a sharp decline below $29,000. However, the BTC/USD bulls gained momentum to climb up again and at this time, has managed to reach $32,781.59.
The present Relative Strength Index is at 80, signalling an overbought condition. This points towards a ‘Fear of Missing Out’ (FOMO) feeling that has typically followed Bitcoin, or any performing stocks or currencies, for that matter.
BTC/USD has received its fair share of the limelight recently as it surged past $34,000 at the start of a brand-new year. The bellwether currency has also hit a new all-time high against gold. Data from MarketWatch showed that it hit 15.62 ounces on New Year’s Day, beating its peak during the 2017 bull run.
However, analyst Lorenzo Stroe from FX Street believes that a large correction is lying on the cards for Bitcoin. He reported that analysts had studied Bitcoin’s previous price history where Bitcoin leapt 20 times before a massive crash to $3,000.
Analyst Rakesh Upadhyay from Coin Telegraph echoes this sentiment. He reported that a parabolic rally currently experienced by BTC/USD increases the possibility of a sharp reversal. Traders caught up in the FOMO sentiment could be caught off guard should this happen as the price may retrace anywhere between 62% to 79% of the entire rally.
In the long term, analysts from Citibank believes that the price of Bitcoin could hit as high as $318,000 by end of 2021. Will the digital gold steal the top spot away from the traditional gold as a favourite safe-haven currency? That is truly the question on everyone’s mind in this new year.
All said and done, it will be remarkably interesting to watch the movement of BTC/USD this week. Will the bulls roar on, or will the bears appear on the scene? That is truly an exciting money question. Traders would also be keeping an eye for the outcome of the U.S. Georgia Senate Runoff Elections as it might cause a certain amount of jitters in the market, prompting a risk-off sentiment which would benefit BTC/USD.
BTC/USD (as of Jan 5, 2021, 9.45 a.m., GMT +8) - $32,781.59
FOLLOWME BTC/USD User Sentiment (as of Jan 5, 2020 at 10.10 a.m.)
Short – 64.01%
Long – 35.99%
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