2019-10-28 17:00 |
Days after a depressing flash crash, Bitcoin had a mind-bending rally, snapping up a 42% gain. BTC moved up from $7,500, briefly touching $10,000. Then the leading coin settled around $9,500, but in just a few short days, the market sentiment was repaired.
The path seems open for bitcoin to stage an end-of-year rally, with $20,000 shaping up as a realistic price target. This could happen due to several favorable conditions.
Growing Bitcoin Dominance: The current dominance of BTC is 68%, down from a recent peak above 71%. Bitcoin certainly dominates over the multitude of smaller altcoin projects and meets competition only from a handful of leading coins with sufficient liquidity. But BTC also offers a higher potential for growth in comparison to altcoins and has established itself as one of the price leaders. The expectation is for Bitcoin to rise to a dominance of above 90%, its long-term stance against altcoins. The top cryptocurrency remains the most liquid asset, supported by an inflow of stablecoins. A growing market cap dominance may keep attracting traders. Chinese Traders Going for FOMO: Chinese traders have been the leading force in Bitcoin price discovery in the past months, led by activity on OKEx, Huobi, and other exchanges. But now, the interest in trading BTC may accelerate further. The passing of crypto-friendly and blockchain-boosting legislation is expected around January 2020, meaning more confidence for growth. Added to this is the expectation for the launch of a national digital asset backed by the People’s Bank of China. In any case, the Chinese central bank has injected significant funds into the economy, and some of those yuan may end up in crypto trading. Chinese traders are not only going for Bitcoin. Following lots of pro-crypto news, folks started immediately boosting the price of several assets with big local presence – NEO, TRON (TRX), QTUM, OmiseGo (OMG), Ontology (ONT). The gains from those altcoins may also return to BTC in the future. Bakkt Launching Options for Futures: Bakkt is opening its market for bitcoin options trading on December 9. The derivative instruments may generate additional volumes, adding to the almost constant growth of BTC contracts traded on the exchange. This will also mean there is an incentive to sway the BTC price in a certain direction. There are enough “whales” that may affect crypto-to-crypto exchanges, and subsequently, prices on Bakkt. Options on futures would create a market that can offset BTC price volatility, and offer a hedge to risk. The presence of futures and options may attract institutional investors to invest in Bitcoin with less fear of volatility, as they can hedge the risk.It’s still October, and the number one digital asset is yet to show if it is capable of a “Halloween rally”. For now, BTC will have to keep the trust for a while. Bitcoin also has long-term expectations to rise ahead of the reward halving. But the last quarter of 2019 may turn out to be much more dramatic, right after BTC started to look “boring”.
What do you think about bitcoin price potentially climbing to new yearly highs? Share your thoughts in the comments section below!
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The post 3 Reasons Bitcoin Price May Hit $20,000 by Year-End appeared first on Bitcoinist.com.
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