Bitcoin (BTC) has long been touted as digital gold by crypto enthusiasts. Now as the digital asset faces its first economic crisis since its birth, Bitcoin has validated the narrative and outperformed gold by a large margin in 2020. This suggests two important things, Bitcoin is here to stay and it is a better bet than gold.
Some popular traditional investors have already jumped on the Bitcoin bandwagon and analysts at Whalemap believe that institutions have been the primary buyers in the $12,000 to $15,000 range.
The over-the-counter trading desk at Galaxy Digital also reported an increase in trading volumes by the institutional investors. The company’s CEO Mike Novogratz and head of sales Tim Plakas, both showed confidence that more traditional investors and funds could enter the crypto space in 2021.
While most investors seem to be bullish on Bitcoin, on-chain data suggests that some whales believe that the rally could have topped out in the short-term, hence, they have turned into sellers.
Let’s analyze the charts of the top-five cryptocurrencies to determine whether the rally may continue for some more time or is a short-term top around the corner.
Bitcoin (BTC) has not closed below the 10-week exponential moving average ($15,613) since Oct. 8. This shows that the trend is strong and the bulls have been buying on every minor dip without waiting for a larger correction.
The upsloping moving averages and the relative strength index in the overbought territory suggest that bulls are in control. The buyers are currently attempting to sustain the price above the immediate support at $16,000.
If they succeed, the BTC/USD pair could resume its uptrend with the next target objective at $17,200.
Conversely, if the pair drops below the 10-day EMA, it will suggest profit booking by traders at higher levels. There is a minor support at $14,800 but if that also cracks, the correction could extend to $14,000.