Bitcoin could be on a break in the new year.
The red-hot crypto currency continued its longest monthly winning streak in more than a year on Monday after grazing a new all-time high above the $ 28,000 mark on Sunday.
Based on the maps, the run will likely be interrupted in 2021, Mark Newton, founder and president of Newton Advisors, told CNBC’s “Trading Nation” on Monday.
“It’s still pretty bearish on the interim basis, as it has just broken out to new highs of all time,” Newton said. “I think there’s another way to go. In the short term, my cycle composite shows us a peak in early January.”
The weekly chart and the relative strength index of Bitcoin reflect the growing interest in the world’s largest digital currency, mostly from institutional investors, Newton said.
Google’s searches for bitcoin are about 750% higher than in the year-on-year, but are still a peak of their highs from 2017, the graph analyst said.
“[With] At the moment, you can make money at 10, 15, 20% a day, “he said. I just do not think investors have the appetite for crypto, while the institutions are definitely on the move. “
Newton’s other chart – which uses three different bitcoin cycles, the most important of which is 273 days to track changes in the path of the cryptocurrency – points to an upcoming turn in bitcoin’s direction.
“All the years we’ve had a stellar Q4, we reversed the trend in late December, early January, and actually went lower,” he said. ‘So I think there will be an opportunity [for] investors to be able to buy especially declines in crypto and bitcoin. ‘
Newton, who has long been bitcoin, ethereum, litecoin and several other digital currencies, said he would like to sell out of his positions “in the next one or two weeks”.
“I think there will be a chance to buy declines in the first quarter of next year,” he said.
Boris Schlossberg, managing director of the FX strategy at BK Asset Management, said that the institutional interest in bitcoin is a good condition for the asset. ‘
“Could it be $ 50,000? Absolutely,” he said in the same ‘Trading Nation’ interview, warning that “if you want to trade or invest this asset, you have to have the mentality that it will have a large amount of volatility. ‘
“As for the ultimate valuation, it’s impossible to say, but one interesting criterion: if you look at the tulip mania, at the height of tulip mania, one tulip was basically worth about one house,” Schlossberg said. “If you do use such valuations, it still has a long way to go, because the final terminal valuation could be $ 150,000, $ 200,000 before the whole move exhausts itself. So, as many people have said, there is still a lot of potential, but there will definitely be massive volatility as we get there. ‘
Disclosure: Newton is long bitcoin, ethereum, litecoin and several other cryptocurrencies, along with closed trusts for bitcoin cash and ethereum.
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