Bitcoin is reaching the end of the year very close to multi-month lows. Yet there are good reasons to expect the price of Bitcoin to begin a recovery from a low of around $5,000 to $6,000 and rise over 2020 to end the year between $15,000 and $17,000. Financial experts predict that the year 2021 is likely to see Bitcoin reach $30,000.
Investors and traders fret over price forecasts concerning Bitcoin, as the price of the digital asset has been very unstable and extremely challenging to forecast. After a year of market pullback in 2018, Bitcoin has staged a few bullish runs in 2019, followed by a bear run. In a bid to predict the price of Bitcoin using technical and fundamental analysis, I will make a full use of the repetitive nature of Bitcoin’s historical patterns which are mostly reflections of impending events and buyers’ behavior to make a Bitcoin price prediction for 2020.
Bitcoin in 2019
In June 2019, Bitcoin recorded its yearly high after hitting close to $14,000. Then, Bitcoin went into a free fall as the supply driven by high price per coin overpowered the purchasing power of buyers. The descent of the Bitcoin price was saved by a support point created by the buyers’ response to the fall in price, holding the price above about $10,000 until September, when the price began to fall again lower than $8000.
Bitcoin Technical Analysis: Short and Medium Terms
Before going further, it is important to say that the Bitcoin price will make a further fall in the short term as a key support line has recently been broken, and unless the price is held by a concentration of buyers further down the price curve, the price may touch close to $6,500 in the short term if the $7,000 support line is broken, make a rebound into the $7,500 and $8,000 price zone and then head back above $10,000 over the medium term. After this, I expect the price will consolidate for a while before going on to break its all-time high in 2021 after the Bitcoin halving 2020 event which will occur in May 2020. The reasoning for these predictions will be explained below.
In the above price chart, Bitcoin found a key support point of $10,100 after it took a strong fall from its yearly high. On 22nd August 2019, the price pegged at a support point of $10,100 after failing to break the resistance at $10,300. The price then fell to peg at $10,100 once again on 25th August, took a rebound to a little above its resistance point and pegged at its support point again on 28th August. At this point, the supply had overpowered the demand causing Bitcoin to break its support point to fall as low as $9,400 on 29th August. At that price, buyers bought more of the asset to send the price above its previous point to trade around $10,800 on 6th September 2019. Bitcoin found another key support point at $7800 on 30th September, 7th October, and 24th October as it struggled to surpass its resistance price of $8,300. Bitcoin then rose sharply to break this resistance, trading at $9,600 on 28th October 2019, and between then and 8th November 2019, it found a support point at $9,200. This support point was broken, as was the round number of $8000. The price continued to move lower, and at the time of writing, the low for 2019 has been made earlier in the week just above $6,500.
In 2018, after Bitcoin had recorded its all-time high, the Chinese government began a massive crackdown on cryptocurrency exchanges, causing speculations of price fall in the media, and in return, forcing buyers to leave the market. This affected the price massively to take its value down to as low as almost $3,000.
Before the end of 2019, the price of Bitcoin will fall even lower, beyond $6,500, due to another crackdown having been launched by China, unless a stronger determinant like the bullish speculation surrounding the Bitcoin 2020 halving event overpowers this fear.
The price chart signifies a bullish move is likely in the first quarter of 2020, after support is found somewhere between $5,000 and $6,000.The blue line represents market capitalization while the green line represents price.
Based on the previous price data, the Bitcoin price is on the verge of staging its first bull run before the event in 2020, and this may possibly start sometime in late December 2019 or early January 2020. The Bitcoin price should slowly rise back into the $10,000 price zone by March 2020 and possibly trade around $13,000 by May 2020 as the price surges during this period should tend to be staged gradually.
Bitcoin Price Prediction 2020
The Bitcoin price surged from $12 in November 2012 to $110 on 8 July 2013. The impact of the Bitcoin halving was effective right after the event, sending the price to rise by 1,000% in just seven months. Similarly, the Bitcoin price after the second halving event recorded a considerable growth from $650 during the event to about $772 in December 2016, which was 5 months after the event, and $907 in January 2017, which was 6 months after the event.
It is worth noting that the percentage change in price during and after the event may not necessarily be the same as the previous percentage change depending on several factors as well as the current value of the asset. The 2012 event led to a massive change in price compared to the 2016 event, and the 2020 event may possibly cause a lesser change in price compared to the 2016 event. I predict that the Bitcoin price may not overtake its all time high in 2020. The price may surge but at a slower pace like the price movement few months after the event in 2016.
By December 2020, the Bitcoin price may trade as high as $17,000 and as low as $15,000 when we consider the price movement after the first six month of the event. In 2021, Bitcoin will possibly trade above its all-time high and push close to $30,000.