2020 has been another prominent year for Bitcoin (BTC) as it more than doubled in value. In the realm of large-cap cryptocurrency projects, BTC only falls behind Ethereum (ETH) and Chailink (LINK) in terms of year-to-date returns.
Looking back to the year of 2017, despite Bitcoin’s impressive rally up to $20K, Ethereum was the main force that drove up the market and pushed the total crypto market capitalization to the then all-time high (ATH) at $833 billion. ETH itself surged to an ATH at $1,420, taking ICO projects along with it.
This year, the spotlight shines back onto the bellwether cryptocurrency as institutional investors and publicly listed companies continue to hoard BTC as means of diversification and hedge against the dollar. These big players tend to hold an asset for an extended period of time rather than just buy and sell on a daily basis like retail speculators. This surge in new demand will eventually lead to a supply shock as available BTC runs dry.
On the demand side, the growing asset under management (AUM) of Grayscale’s digital asset trust indicates an increasing appetite for cryptocurrencies. PayPal will also play a leading role in onboarding retail investors as it will provide a one-stop service for crypto buying, selling, and spending.
Bitcoin Technical Analysis
Bitcoin (BTC) slightly dipped down during the weekend after a rejection from the $16K level which is also the top of the yellow rising channel. The relative strength index (RSI) also corrected down from an extreme overbought territory but managed to stay above the rising trend line.
The immediate crucial support for Bitcoin was at $14K level which was the 2019’s yearly high and once a formidable resistance in 2020. Maintaining above said level will lead to continuation into an upside.
The next support for BTC would be at the bottom of the channel at approximately $13K. Moreover, bouncing within the channel will lead to more consolidation period and will not compromise the BTC bullish uptrend structure.
Ethereum Technical Analysis
Looking at the chart, the overhead resistance for ETH would be at $490 which is its 2020 highest price point and also 2018’s last top before the breakdown. Surging beyond this level will complete the Cup and Handle price pattern which is generally a bullish indicator.
Historically, the daily RSI at 90 level always indicates that the price is overextended and ready for a correction. The current RSI for ETH is at 70 and still has more room to grow.
The next bullish target will be the 161.8 Fibonacci’s extension at $532 and followed by the 261.8 Fibonacci level at $808.