Higher-than-average spot volume, even for the past month, is helping push bitcoin’s price upward at a time when traders are plowing into ether futures at a quick pace to open 2021.
- Bitcoin (BTC) trading around $33,987 as of 21:00 UTC (4 p.m. ET). Gaining 8.9% over the previous 24 hours.
- Bitcoin’s 24-hour range: $29,986-$34,220 (CoinDesk 20)
- BTC well above its 10-hour and 50-hour moving averages on the hourly chart, a bullish signal for market technicians.
Bitcoin’s price made gains Tuesday after a four-hour sell-off was reversed around 06:00 UTC (1 a.m. ET). That led to a steady climb to as high as $34,220 as of press time.
Read More: Bitcoin Bounces Back Above $31K After Monday’s Drop
“Bitcoin has extended its already-steep uptrend to new all-time highs,” said Katie Stockton, a technical analyst for Fairlead Strategies. “The signs of exhaustion that appeared in December were absorbed via a brief consolidation phase, and there are no active overbought ‘sell’ signals.”
So far in the five days of 2021, the world’s oldest cryptocurrency is up over 16%.
Stockton still sees “support,” the price floor where traders step to buy, much lower than the current spot price.
“Initial support is below $25,000, which hints at a continued day-to-day volatility,” she said. Since Dec. 31, bitcoin’s realized volatility has been creeping back up, from 55.5% to 63.3% Monday, a rise not entirely uncommon of late but nonetheless something traders track.
“On a technical basis, things have been overbought for a while,” said Andrew Tu, an executive for quant trading firm Efficient Frontier. “The overall trend is still upwards and this seems unlikely to change, though the pace may not be like it was during the holiday season.”
Spot bitcoin volumes are looking quite robust; Monday was the highest-volume day on the eight CoinDesk 20 exchanges in the past month, at over $6.6 billion. Tuesday’s spot volume is also looking healthy, at $4.2 billion as of press time. In the past month, volumes have averaged $2.3 billion per day.
“If bitcoin continues to rally at its current rate, I believe we could see a price of $54K around Valentine’s Day,” said Nicholas Pelecanos, head of trading for blockchain ecosystem provider NEM. “We could see a higher price than this by the end of Q1; $74K is also on my radar.”
Read More: JPMorgan Predicts Bitcoin Price Could Rise Over $146K in Long Term
However, Pelecanos still envisions an eventual retreat from those lofty forecasted prices. “I have the sense a pull back from $54K would leave the bitcoin price to consolidate around $35K,” Pelecanos said.
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