Bitcoin rallied a bit on Thursday, going back and forth a bit in a relatively short range before closing the daily candle up a few hundred bucks around $37K. So continues Bitcoin's grind higher - which it's going to be a grind - as Bitcoin attempts to reclaim the $40K - $42K high it struck a few weeks ago.
(February 4, 2021 8:30PM EST)
Outlook:
Bitcoin rallied again a bit on Thursday, closing around the $37K level as BTC continues to find buyers pushing the asset back up near the highs just north of $40K. From a quant standpoint, as supported by Pantera Capital's Dan Morehead and on-chain analyst Willy Woo, Bitcoin has kept a relatively steady pace on track with PlanB's Bitcoin Stock-to-Flow model and on a monthly basis appears on pace to reach a low six-figure price by EOY 2021, or conservatively 2x+ from current prices. Demand is high and only increasing which leads to a larger market cap which validates the asset class which allows institutional investors to pitch it as an investment that begets more institutional money which leads to higher prices. The model is playing out for a purely logical reason, and the more it is embraced by an increasingly wealthier and more open-minded younger generation (Gen Z now entering the workforce), Bitcoin will continue to outshine gold as the new "Gold 2.0" inflation hedge asset class. Bitcoin and crypto as a whole will only become more important to have in anyone's portfolio to survive another $2 trillion+ stimulus package that appears well on its way.
Outspoken MicroStrategy CEO and Bitcoin proponent Michael Saylor is hosting a 2-day video conference for institutional investors and execs at public companies on the semantics of buying Bitcoin as an inflation hedge, store of value, appreciating asset, and the best practices for adding it to a company's balance sheet as he has done in recent months himself. If he accomplishes even a fraction of his target goal of getting 1,400 corporate leader attendees to follow his lead in buying Bitcoin en masse, then that should further lift Bitcoin's price to higher uncharted territory.
In traditional markets, Bitcoin interestingly appears to have decoupled from gold a bit as gold fell sharply today to below $1,800, closing around $1,795 as the US Dollar continues its rally, breaking above the 50 Day EMA. The long-term trend for the USD is down, but in the short-term, it appears to be getting a relief bounce which, if you're confident, allows you to add to your gold and crypto longs at a discount before each asset continues higher, respectively.
Support: Look for support at the $30K which is now supported by the 50 Day EMA and what looks like our bottom at this point. If Bitcoin continues grinding higher or even sideways, I might make a case for $35K as near-term support.
Resistance: Look for resistance at $40K, which we'll probably need to retest a couple of times before heading higher. After that, look for resistance around $50K, then $55K which roughly equates to a $1 trillion market cap for Bitcoin, then every $10K until $100K. Make no mistake; we're going higher, it's just a matter of when.
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