One of the asset classes that underperformed during the coronavirus crisis is Bitcoin. Bitcoin price consolidated for more than two months before the recent breakout – but it was worth waiting. The pattern, a continuation one, points to much higher levels sooner rather than later.
Many investors felt like Bitcoin does not justify its safe-haven attributes. Gold or silver, for instance, outperformed during a similar period. Moreover, Ethereum delivered 75% returns as of August 6th, while Bitcoin a mere negative 2%. Therefore, if the Bitcoin price is to play a catch-up game, there is much potential ahead.
Goldman Bets on Blockchain
A recent article in the financial media caught Bitcoin investors’ attention. Goldman Sachs just announced a new head of digital assets.
The news comes to boosting trust in the future of blockchain and its role in financial markets. The future of financial markets, according to Goldman’s newly appointed head of digital assets, lies on electronic ledgers . Moreover, Goldman expands its digital assets team with massive hiring in Asia and Europe.
The months-long consolidation for Bitcoin price led to many fleeing the most-wanted cryptocurrency. Attracted by a flamboyant stock market and steady returns on the commodities markets, many speculators turned their backs on Bitcoin. However, Bitcoin did nothing but consolidating.
Bitcoin Price Technical Analysis
But that consolidation is behind us now. A close look at the price action from the March lows reveals a pennant formation that just broke higher in the second half of July.
Its measured move equals the distance from March lows, projected from the breakout moment. In other words, the Bitcoin price has a target of $16,000, judging only by the technical picture.
Some technicians also use the time element when interpreting a pennant. More exactly, they measure the time it took for the price to consolidate (approximately two months) and project it from the breakout moment. Bitcoin price should reach the measured more in less than the time it took the pennant to consolidate. On the other hand, a move below $9,500 invalidates the pennant scenario.
Bitcoin Price Forecast