We are still only a few weeks in, but even the most cynical observer cannot deny that cryptocurrency has got off to a healthy start in 2020. In fact, when BTC-USD crossed the magic $10,000 barrier a week into February, that represented a surge of around 34 percent inside the space of two months.
What goes up must come down, especially in the world of crypto. However, there are reasons that go beyond the charts to believe that this could be the year for those who have been sitting on the fence till now to finally jump into the world of digital assets in general and Bitcoin in particular.
The charts don’t lie
Before we get into those peripheral factors, let’s look a little closer at the hard data. The latest surge has a strong basis – over the holiday period and the beginning of January, Bitcoin held for a period of two weeks in the $7,000 to $7,500 range. This period of consolidation was followed by a sudden and dramatic surge in mid-January that led to that all-important $10,000.
If you take a longer-term view, you see what Victor Dergonov describes as a reverse head and shoulders that started to form in November. Interestingly, Dergonov predicted the $10,000 peak more than three weeks before it happened, and also foresaw the slight pullback that followed in mid February. His longer-term prediction is for a further period of consolidation before once again climbing, to match the 2019 highs around the $14,000 mark.
A growing market
So much for the chart analysis, but that only tells part of the story. The Bitcoin market is no longer tucked away in its silo, as automated trading apps like bitcoinsrevolution have opened it up to anyone and everyone. The overall effect is that the crypto market has become a highly liquid and accessible way for thousands of people to generate passive income.
It runs deeper than just casual investors with apps, though. Over the past year, there has been a growing acceptance of crypto among the major institutional investors. In fact, a survey conducted by Greenwich associates last summer revealed that some 47 percent of US institutional investors feel there is a place for digital assets within their portfolios, a figure that is climbing with every passing year.
When halving means growth
The other factor that nobody can ignore in 2020 is the Bitcoin halving, which is due to take place in May. Previous halvings in 2012 and 2016 caused a run on Bitcoin, seeing the asset’s value skyrocket over subsequent months. This comes about because a drop in the block value leads to a reduction in mining activity, thereby boosting the value of those coins that are already in circulation.
This year there is some debate as to how much effect halving will have on what is now a far more mature market. Of one thing we can be quite confident, however. While it might not surge in the way that it did in previous years, it will almost certainly not go down, and that can only be good news for those entering the market right now.
