While we can't give you financial advice, we can give you some speculations as to what needs to happen for Bitcoin to keep growing.
February 2021 was a major breakthrough for Bitcoin (BTC), as the digital currency surpassed $50,000 for the first time since its creation in 2009. After $50,000, a steady price rise continued and Bitcoin passed the $64,000 mark in April 2021. At this point, many crypto market analysts predicted a continuously increasing price for Bitcoin in 2021 and possibly a $100,000 target at the end of the year.
However, the market volatility of cryptocurrencies came into action and Bitcoin took a nosedive in May 2021, taking all the crypto market down with it. The dip in Bitcoin’s price continued and on July 20, 2021, one Bitcoin was priced at $29,807, less than half of its all-time high two months ago when it stood at $64,000.
After the somewhat scary price of $29,000, Bitcoin started its bullish run (again) and as of Aug.18, 2021, it stands at $44,736.38.
Many crypto analysts have speculated that if Bitcoin breaks the $47,000 level again — as it did a few days ago — and maintains its price for a certain period, $50,000 can be a reality.
Market whales may be the deciding factor in taking Bitcoin past $50,000. When we speak of whales in the Bitcoin sense, we’re essentially referring to a group of about 1,000 investors who own 40% of the total Bitcoin in the market. Even a small movement from these giant investors causes a price effect in BTC.
With that in mind, here are some reasons why Bitcoin can break the $50,000 barrier in the upcoming weeks.
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A Longer Hold by Major Investors Is Key to Bitcoin Reaching $50K
The notion of decentralized currencies and how they may be an effective hedge against inflation in runaway economies is gaining traction throughout the world.
Long-term investors are convinced that Bitcoin downfall predictions are progressively fading forever, with most world nations taking measures to recognize and regulate cryptocurrency — El Salvador being the first country to accept Bitcoin as legal tender.
Another great adoption example here is South Korea — the country is taking major steps towards regulating cryptocurrencies in its financial systems; however, the Korean nation also wants to regulate the price, which goes against the whole concept of decentralization.
More than 50% of world banks are exposed to Bitcoin in one way or the other. Giants in the banking world like JP Morgan have started to offer their services to elite clients (huge investors, mostly above a million dollars) for cryptocurrency investments.
If more nations continue to join El Salvador, South Korea and other cryptocurrency enthusiasts, Bitcoin is going to breeze past $50,000 in a matter of weeks.
Bitcoin's Institutional Acceptance Is Increasing
Many institutional banks have been aggressively pumping money into digital assets as well as blockchain-based technological businesses, while their holdings or investments are directly connected to Bitcoin and other cryptocurrencies. The recent price drop in Bitcoin provided an opportunity for all of them (as well as crypto funds throughout the world) to increase their investments.
Tesla, the notorious electric vehicle manufacturer; Microstrategy, a business analytics platform; Voyager Digital, a firm specializing in digital assets and Galaxy Digital Holdings, a digital currency-oriented merchant bank are among the most prominent institutional holders of Bitcoin.
If investments from world banks and multi-billion dollar companies continue to invest in Bitcoin at the same rate, then $50,000 can be a possibility in the upcoming weeks.
Elon Musk’s Twitter
Elon Musk’s love story with Bitcoin is there for the whole world to see. A couple of tweets and the price goes to the sky, and another set of tweets trigger a drop of 20%!
Many believe that Elon Musk was a contributor to the downfall of Bitcoin in May 2021, as the multi-billion dollar entrepreneur tweeted his concern about the depleting fossil fuels used by Bitcoin miners. This likely prompted Bitcoin to take a fall, and the crypto dropped to its lowest level since February 2021. Criticism poured in and Musk changed his stance a week later where he sided with Bitcoin miners who, according to him, showed their commitment to using renewable energies for mining BTC. Elon went on to post a meme about Bitcoin on June 3 which took the price of Bitcoin up by 5%!
Long story short, Elon Musk has the magic wand to influence Bitcoin through Twitter. Right now, Musk seems to be siding with Bitcoin and a couple of tweets from him could potentially take BTC over $50,000 or more!
High Levels of Greed Index
The greed factor on the Crypto Fear & Greed Index has hit an all-time high in the past four months. In July, the index stood at 19, now it's hovering around 70 — the polar opposite of “extreme fear.” If Bitcoin manages to break the barrier of $50,000, a knee-jerk reaction from the market can take the #1 cryptocurrency by market capitalization to new levels — even to an all-time level high, which currently stands over $64,000.
A sharp dip, however, can slightly disturb the Crypto Fear & Greed Index. However, the goal is to not fall below the support levels of $40,000-$42,000 and jump back to $46,500, which could propel the journey of BTC to $50,000 once again.
The Effect of Bitcoin Whales
After the 2020 bull run, exchange balances dropped in late 2020 and early 2021, but rapidly rebounded during the May and June price correction. Since then, exchange balances have remained mostly unchanged despite one sharp drop in July, indicating that large organizations have ceased buying Bitcoin in bulk and removing it from exchanges.
Removing cryptocurrencies from exchanges (like perhaps during the July drop) usually entails keeping Bitcoin in secure cold wallets instead — mostly by Bitcoin whales — a bullish sign since it signals that these investors see Bitcoin as an asset they want to hold onto for a long time.
Bitcoin's limited quantity and falling yearly growth (due to its built-in halving) are significant financial characteristics that make it an inflation hedge. For the majority of Bitcoin's history, it was mostly held by retail investors.
Institutional investors have only become interested in the asset during the previous 12-18 months. There is a substantial bull case for a price increase in this crypto asset now, given the $100 trillion handled by the world's top asset managers.
Bitcoin whales have been transferring a lot of BTC around, according to Blockchain.com. For example, a whale recently transferred 15,000 BTC — presently valued at over $700,000,000 — in a single transaction from Binance to Xapo.
BTC Bullish Run Needs to Resume
Over the last few weeks, Bitcoin has enjoyed a bullish run, with the cryptocurrency reaching $48,000, compared to July where it fell below $30,000. Right now, Bitcoin seems to be in bearish mode with $44,200 as its weekly low — a significant difference when compared to its weekly ATH of $48,200.
The bears and the bulls have made things interesting here. Bearish investors will target $40,000 as their key support level, while bulls will aim to break $50,000 in the upcoming weeks — Fascinating stuff!
Bitcoin to the Moon?
To summarize, the popularity of Bitcoin is on the rise, with many major institutions of the world succumbing to the decentralized world of cryptocurrency. A sharp rise or a dip can be expected but hey, isn’t that a common factor in the world of Bitcoin?
$64,804.72 is Bitcoin’s all-time high. Breaking it would be the next target for BTC after it passes $50,000. A sharp run to ATH can be expected owing to the levels of greed index being at high levels for the past few weeks. As always, secure your investments by getting valuable recommendations from crypto and financial analysts, and do your own research.
Bitcoin to the moon or to Mars?
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