There is no question that Bitcoin is having a stellar year after a long period of uncertainty in the cryptocurrency markets. Since early September, a time when the coronavirus pandemic was still wreaking havoc on the global economy, Bitcoin has appreciated by 35%. This shows the Bitcoin price price to be higher than the previous price highs shown when Wall Street investors started seeking for alternatives to the stock market.
What goes up must go down: It did not take long for Bitcoin to go through a pullback once it surpassed the $18,500 mark on November 18. The pullback was quite strong and did not stop until BTC/USD settled at $17,000, but there no indications of jitters in the market. Most investors shrugged it off as normal volatility caused by traders cashing in on profits only to jump back on the market with another position. This does not mean that markets were devoid of fear; some analysts quickly pointed out that 30% pullback movements crashed the Bitcoin markets during the summer of 2019.
A flash crash is something that seasoned Bitcoin investors can certainly withstand. The current focus is on the opposite side of the sentiment spectrum, which means that traders are actually beginning to speculate how quickly Bitcoin can reach a currency exchange price of $20,000.
Judging by the action on the Chicago Mercantile Exchange, some futures traders are beginning to take longer positions that bet on BTC/USD reaching the highly psychological $20,000 mark. Should the price hovering near $20,000, the next potential move would be more bullish, but not for long. We could then see the strange phenomenon of bearish bulls, which consists of traders raking in profits as they jump in and out of the market. This strategy is not for the faint of heart, and it could end up being expensive for American traders who do not have a plan in place to reduce their capital gains tax burden.
All in all, there are not too many traders who believe Bitcoin will surpass the $20,000 price this year, but we can surely count on them watching the market very closely with bullish eyes.