Amid a wild year filled with economic uncertainty and pandemic concerns, the crypto industry’s top asset, bitcoin (BTC), has posted a standout year. The asset’s price has pushed considerably higher over the past few weeks, reaching high, seldom-seen price levels. John Bollinger, a well-known trader, author and financial analyst, said further upside is not out of the question for the asset. The $14,000 level, however, stands as a formidable opponent.
“The real thing is — can we clear this $14,000 level, which is so psychologically important now because it’s exactly where the rally stopped in June of 2019, just shy of $14,000,” Bollinger told me in an interview on October 27, 2020.
Bollinger’s comments came only hours prior to the market’s rejection near that very level on Oct. 27, proving the expert hit the nail on the head in terms of the level’s importance.
[Ed note: Investing in cryptocoins or tokens is highly speculative and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment.]
Bollinger’s general comments on bitcoin currently
“I’m actually pretty constructive on bitcoin at the moment,” Bollinger said. “I’m not an outright screaming bull, nor am I bear,” he said clarifying his stance. Bollinger’s comments come in reference to bitcoin’s price chart, from which traders and analysts often evaluate future possibilities based on previous action.
“The pattern is quite constructive. It looks like we’re in for higher prices but, like with everything, in every investment, we play it as it goes along.”
Bitcoin’s fall and subsequent sideways price action
Since its last all-time price high near $20,000 in 2017, bitcoin has ridden a volatile roller coaster price path. Precisely one year later, in December 2018, the coin found itself priced all the way down near $3,200, based on Coinbase exchange data on TradingView, a charting platform. Bitcoin rallied in the following months, reaching $13,868 by June 2019, only to fall back down in price later.
After several more months of ups and downs, bitcoin reacted similarly to mainstream markets between February and March 2020 around pandemic concerns, falling to $3,870 from $10,500. The asset rallied in the weeks after the incident. BTC reached all the way back up to $13,863 on October 27 before facing a stark rejection painfully close to its 2019 high, falling nearly $1,000 after failing to decisively break the level.
Bollinger described bitcoin’s price action since the fall from its 2017 all-time high as a “major multi-year consolidation.” He added, “We’re just trying to break out of that consolidation pattern now.”
Noting bitcoin’s price rise in 2019 near $13,000, Bollinger said the chart now looks “constructive,” as bitcoin once again revisits those levels many months later. “The pattern is one of accumulation not distribution and the technical indicators are confirming the pattern pretty well now,” Bollinger explained. At its simplest, accumulation generally means buying, while distribution hints toward market selling.
Presidential election expectations
With the 2020 presidential election on November 3, markets might logically react off the event, given the economic factors at play. Bollinger thinks the event will not impact bitcoin, however. “I don’t think the election is really going to impact bitcoin one way or the other,” he said.
“Far more important is to look at important corporate adoptions,” he added, subsequently mentioning PayPal’s PYPL recent news as an example. On Oct. 21, the payments giant announced the addition of multiple crypto assets to its platform, including bitcoin.
Bitcoin’s price occasionally travels in line with mainstream markets, however, so what if stocks fall around election time? Well, Bollinger said he thinks the election will be anticlimactic for mainstream market assets.
“I suspect that for the traditional markets, the election itself is going to be pretty much a non-event. That is, we’ve built in such a tremendous level of emotional involvement going into the election, I think that whatever the results are, that could actually be a bit of a let down, at least for some people, and I think that the traditional markets are actually going to be either flat or higher coming through the election cycle. I am not one of these people that’s forecasting doom and gloom in relation to the election, or any events that may occur after the election.”
Disclaimer: I actively trade cryptocurrencies, as well as hold a small amount of BTC, ETH, LTC, ZEC, BCH and LINK.