Bitcoin, already one of best-performing assets so far in 2020, is likely to soar in value this year on the back of central banks' money printing agendas and a spike in public interest, according to analysts.
Nigel Green, CEO of deVere Group, one of the world's largest financial advisory and fintech organisations, said Bitcoin's upward outlook follows a wider positive investor sentiment. This week Bloomberg analysts said in a note that it could jump to $20,000 in 2020.
Bloomberg analysts said this year is about increasingly favourable technical and fundamental underpinnings for Bitcoin, and less so for the broader crypto market. Bitcoin ended 2019 at about $7,000, near the bottom of its range, favouring a shift toward the peak.
Last year, the high was about $14,000, which would translate into almost double in 2020 if rotating within the recent band, and mean little in the big picture. The same forces buoying gold support Bitcoin, yet the supply of the crypto is more constrained. Adoption, by default, is the primary Bitcoin metric, and our indicators remain positive.
"Bitcoin price is already up around 30 per cent from the beginning of the year, putting it on track to be one of the year's best-performing assets. I believe it would be surprising not to see Bitcoin soar in value further throughout this year for three key reasons," said Green.
"First, the massive money-printing, or quantitative easing, programmes currently being rolled-out by central banks around the globe devalue traditional currencies and provide a boost for other recognised stores of value, such as Bitcoin and gold. Second, the global health emergency has been accelerating the demand and need for digital money. And third is that it is a legitimate hedge against longer-term inflation concerns," he said.
Geopolitical risks, including the heightening of US-China tensions, Brexit and the US presidential election can also be expected to serve as a boost for Bitcoin, said Green.
"Investors will increase exposure to decentralised, non-sovereign, secure digital currencies, such as Bitcoin, to help shield them from the potential issues in traditional markets."
Analysts said a break below $8,832 could send Bitcoin towards $8,220 in turn, any break in the other direction i.e. above $9,937 may trigger a rally towards $10,301. Nonetheless, the daily support and resistance underlined on the four-hour chart should be watched closely.
Last week, Bitcoin tested the 50-day moving average yet the price rallied later and generated a bullish signal. On May 28, the cryptocurrency climbed to the current trading zone $9,080-$10,507 indicating that the bulls were still in charge.
