Tanya Abrosimova
Independent Analyst
- Bitcoin hit a new multi-month high, stopped on approach to $19,000.
- Technical indicators show that the asset is overbought.
- On-chain metrics imply that Bitcoin is poised for further growth.
Bitcoin bulls had another shot of dopamine as the pioneer digital currency resumed the growth after a short consolidation phase above $18,000. BTC/USD hit $18,980 during early Asian hours on Saturday and retreated to $18,650 by the time of writing. Bitcoin's market capitalization surpassed $345 billion, while its average daily trading volume settled at $39 billion.
Market experts tout Bitcoin as a safe-haven
As Bitcoin clears one barrier after another, the experts come up with optimistic forecasts for 2021. Thus, the managing partner of Fundstrat Global Advisors, Tom Lee, recently said that the asset would replace gold as a store of value and a hedge against inflation.
It's killing it this year — it's just crushing all other hedges and asset classes this year, but in 2021 I think Bitcoin could be the year of the fireworks... the best is probably yet to come, he said in the interview with Yahoo Finance.
Earlier, Rick Rieder, BlackRock CIO, voiced a similar view, pointing out that Bitcoin is more functional than gold.
Bearish signals continue piling up
Meanwhile, the charts look worrisome. Thus, the TD Sequential indicator presented sell signals in the form of a green eight candlestick on numerous timeframes, including 3-days and weekly charts. The bearish formation requires a confirmation in the form of a red nine candlestick followed by a red two candlestick trading below a preceding red one candle.
BTC/USD, 3-day and weekly charts
Notably, the price has the potential to retest new highs before the correction starts, but investors should be careful at this stage as the market is grossly overbought.
On-chain-metrics say the way to the moon is clear
On the other hand, IntoTheBlock's "In/Out of the Money Around Price" model implies that there are significant barriers up until $19,300 as less than 1000 addresses bought slightly over 3,000 BTC between the current price and $19,300.
 Analytics and Charts21-637415543221669791.png)
Bitcoin In/Out of the Money Around Price
On the other hand, BTC is sitting on top of firm support as over 400,000 addresses previously purchased over 350,000 BTC between $18,000 and $18,600. This supply wall has the potential to absorb the selling pressure and catapult BTC to new highs.
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