Global Market Analysis

During this time last year, BTC closed the session at $7294. Fast forward a year, at the time of writing this, BTC is currently trading above $19,000. This is still an increase of 162% which is far from negligible.

However, between 2019 -2020, there is so much more to Bitcoin than just the three-digit increase. We will explore it together, let’s go for a retrospective!

The Fall, yes but …

Against the backdrop of an epidemic that has become a pandemic, investors are seeking shelter and hedging risk at all costs after the collapse of the global financial markets in March 2020.

For Bitcoin, the hardest blow was during the 12th March session with a price of $7934 at the time of opening and fell to a price of $4800 at the closing. This represents a drop of more than 39% which dealt a serious blow to investors’ confidence.

Indeed, a very large number of long positions, placed by those who wanted to play the $7000 bounce were liquidated without even having had time to activate their stop-loss.

An opportunity arises out of the ashes

While 12th and 13th March were very painful for some, it was also a very profitable time for those who had placed their limit purchase order at the $3800 level.

This is the area from which the increase to the $13,800 level had started the previous year and had remained untested since then. As we know the rest, Bitcoin has been relentless and it shortly began a continuous upward trend that was still uninterrupted at the time of writing.

After the fateful breakout at the $10,000 and $12,500 levels, it became evident that Bitcoin wasn’t gonna look back. Currently, BTC Trade is around $19,200. For the brave ones that seized the opportunity at $3800, this represents an increase of more than 400%.

Are we in the same situation as in 2017?

The current situation on the cryptos market is absolutely not the same as in 2017 – the period when the number of fraudulent ICOs and other altcoins increased by several thousand percent in a very short period of time.

So, what has changed? It is none other than the maturity of the market. Having said that, even though crypto is still at its infancy stage and far from traditional finance, it is clear that this digital asset/currency is a force to be reckoned with given the leaps and bounds it has made since 2017. 

One of the most beautiful proof remains the participation of institutional investors who can no longer pretend to ignore Bitcoin and even Altcoins – some major investment banks have completely changed their approach. JP Morgan is a good example of this.

Cryptos investment funds have become important, like Grayscale, which was created in 2013, and took off in 2020, with currently more than 10 billion dollars of cryptos under its management.

With institutional investments and funds rapidly entering the crypto space, there is no doubt that 2021 will be an exciting ride.  

What to expect for 2021?

The year 2021 looks quite promising for the cryptos market as a whole. Indeed, even if we can’t give an exact price for BTC, market sentiment is rather favourable for a continuation of the increase.

Some analysts do not hesitate to predict a BTC at more than $100k, $200k or even above $500,000. Let’s be clear, these predictions are a bit far-fetched for the simple reason that once $20,000 is passed, we will enter into discovery territory with no price history.

We can mention the Stock-to-Flow model and according to his predictions, BTC should reach $100,000 by the end of 2021. As we said just above, nothing is certain!

On the other hand, what we can learn from this model if we compare with the situation in 2017 is that BTC generally reaches its peak when the days remaining before the next halving is between 800 and 1000. So we wouldn’t be close to the top yet, good news!

What about altcoins?

As we have said previously, things are not the same as in 2017. Most of the altcoins, especially those with the biggest capitalizations, have working projects that back them up and not just merely a whitepaper. In this respect, you can be sure that progress is benign expedited.

ETH is the perfect example with the launch of ETH 2.0 on 1st December or XRP which concluded a partnership with Microsoft last month. And let’s not forget ADA, which is expected to introduce smart contracts on its blockchain in 2021.

Conclusion

There is no denial that we went through a rollercoaster ride of emotions this year in the crypto market – from extreme fear to the most intense euphoria! What we must remember from this year 2020 is that the crypto market, although far from being mature, is gaining momentum in maturity – thanks in particular to the contribution of institutional capital.

The main altcoins are now based on solid projects with real utility and certain problems such as scalability should be solved very soon.

There is only one conviction: the best is yet to come! Buckle up for the ride!

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