Crypto VC: Bitcoin needs to consolidate if it wants to reach $100,000 in the near future
Bitcoin, Ethereum and other cryptocurrencies have experienced a remarkably strong rally in recent days and weeks. In the last seven days alone, BTC gained 30 per cent against the US dollar, while ETH gained 60.6 per cent.
Bitcoin is expected to continue its rise as long as the US dollar continues to fall and institutional capital switches from gold and other asset classes into BTC.
However, a leading crypto venture capitalist has argued that the market is overbought and ripe for a consolidation or correction. This consolidation or even BitQT correction will be healthy for the long-term trajectory of this bull market, he explains.
Chris Burniske, a partner at Placeholder Capital, says that the crypto market „needs a pullback and consolidation if BTC is going to get into the $100,000 range and ETH into the mid to high thousands in this bull market.“
He explained that much like the ocean, markets, especially the crypto market, is made up of a „series of waves“.
Burniske shared the chart below, which shows that in previous bull markets, BTC experienced a series of waves in which there were large spikes and pullbacks.
5/ Using the weekly $BTC chart, we can see the last bull market (2015-2017) had 2 attempted waves in 2015, before a breakout wave in late 2015, followed by 5 big waves in 2016-2017 (log scale chart). pic.twitter.com/QS0PwTttTA
– Chris Burniske (@cburniske) January 6, 2021
In the last three months, Bitcoin has not seen a significant pullback big enough to say that the current wave has ended. Burniske therefore believes that the markets are primed to cool down again.
This has also been voiced by other market participants, who note that the extremely strong 200 percent rally Bitcoin has experienced since the October lows is unlikely to last too long.
Bitcoin and Ethereum spike on Google Trends
While the market may be primed to cool off, it is worth noting that Google Trends data shows that demand for the leading cryptocurrencies is skyrocketing. Joseph Young recently shared the data below, noting that the keyword „bitcoin“ has seen a sharp increase in search volume in recent weeks.
It is almost halfway to the highs of 2017, but is much higher than it has been in the last 12 months.
The keyword „Bitcoin“ on Google Trends is surging.
Still half way there to 2017 levels, but it’s much higher than the past 12 months. pic.twitter.com/HH9xv9flvv
– Joseph Young (@iamjosephyoung) January 6, 2021
It’s unclear whether or not this upswing will continue, but if it does, there could be another push higher as private investors‘ money begins to buy up a large amount of Bitcoin’s circulating supply.