Industry News Two Potential Factors to take Bitcoin over the Previous Record in 2020

Two Potential Factors to take Bitcoin over the Previous Record in 2020

January 21, 2020

As the first quarter of 2020 gets well underway, bitcoin is already the best-performing asset of the year. It attained the same achievement in the previous year, where it ended up as the best alternative for any investor. At the start of January, BTC was priced at around 9,200 USD. A year previously, the same amount of bitcoin was being traded for 6,300 USD. The jump is clearly visible and it drove the profits of traders higher than any other asset class in the world.

In many ways, this is no news whatsoever. Bitcoin has been in this boat ever since early 2017, which is now three years ago. From that point on, the cryptocurrency managed to attain something similar to a breakout moment, even though this concept was still an unknown back then in many ways. In even more ways, it is still the same right now. However, this dubious nature of cryptocurrency, especially the BTC token is not interfering with its ability to draw in users and funds into its ecosystem. Because of that, it continues to grow and even swell in big moments of either price breakouts or entire consistent and steady bull runs.

Now, many analysts believe that a big breakout could occur this year and for two separate reasons. While some of these experts are most similar to John McAfee than any serious observer of this field, others are much more valid sources of opinions. Now, they all seem to align with the idea that bitcoin is about to test its previous record. Here is the breakdown of these two factors, what do they mean potentially for the bitcoin network, but also the future of the entire crypto market.

Speculative Bubble

The current upswing in the crypto market is not something many are welcoming with open arms. In the finance industry, a range of experts believes that the rally is just a passing fad. In fact, some are labeling it a speculative bubble that will lead the investors nowhere apart from massive losses. Peter Schiff, the famous forecaster of economic developments, stated that so far, he cannot see any foreign capital is coming into the bitcoin space.

Instead, in his view, the value is being driven up through speculation that takes place inside of this space. He explains this with heightened geopolitical risk, mainly seen in the confrontation between the US and Iran. As a result, both gold and bitcoin moved higher in terms of their price, but Schiff sees two different reasons why this took place. Gold is being purchased by investors as a clear and proven safe haven. Bitcoin, according to the analyst is being bought by speculators who are betting that the same investors will turn from gold (or at least hedge their bets) and also purchase bitcoin to protect their standard fiat funds.

Continued Growth

The problem with the perspective that Schiff takes is that it accounts for the present moment and the very near future. It does not explain how the same cryptocurrency managed to grow over the years and attain a clearly organic influx of users. It does not offer any explanation of why its market cap reached a huge number before it oscillated and why it will continue to behave like this in the future.

His position just labels the current state as one based on the speculative nature of a potential opening for the fast-flip traders. However, there is a lack of explanation about why the same approach did not bring down the entire domain long before. That is why, if the current state of the bitcoin network is taken into consideration, there are two major reasons why the records of 2017 could be revisited this year and even taken a notch or two further up.

Dominating the Market

Historically speaking, usually, the money that first pools into bitcoin is that which comes from its neighbors – in this case, this means other altcoins. Since January 2018, there have been many optimistic projections about the rise in value for a range of top-tier cryptocurrencies. While some did attain a level of success in this, none of the returned to the records formed in the period after the incredible bitcoin surge of 2017.

Right now, there is no massive trust in any altcoin, including ethereum, so the money naturally moves to the biggest one in the group. In numbers, the control that bitcoin has over the crypto market currently stands at almost 68 percent. Many believe that this will grow to over 90 percent in the coming months, leaving all other digital currencies to basically reinvent themselves in relation to a small niche or to just die off. Like in esports and many other modern fields, the winners are only made into bigger winners through the impulse of their previous success.

Technical Bullish Indicators

Recently, the price of bitcoin tested some big technical resistance. The 200-period moving average is still supposedly stopping bitcoin from kicking off a major rally. However, closing that is above a 200-MA has the potential to propel bitcoin above the previous record.

Here, the upcoming halving event this year could also provide some fuel to the investor fire. With it, the difficulty of mining should go up and theoretically, the demand and the price for BTC tokens should also go up as well.

Perfect Set of Occurrences

If both of these factors take place simultaneously, there is little doubt that this would kickstart a whole new bullish cycle. The question of whether or not could these two factors raise the price enough or would the bull run ends with a figure below 20,000 USD is not essential. For now, the investors and traders both want to see some upwards action.

Yes, it would be much better if the same action is sustainable by other and wider economic factors, but if that does not take place, the users will still like to experience a bullish trajectory. Even if it is built on weak foundations, the rally would be welcomed news for the otherwise bearish or lethargic BTC market.

Source: newsBTC