Bitcoin may be taking a breather in the new year.
The red-hot cryptocurrency continued its longest monthly win streak in more than a year on Monday, after hitting a new all-time high above $ 28,000 on Sunday.
Based on the charts, that run could be interrupted in 2021, Mark Newton, founder and president of Newton Advisors, told CNBC’s “Trading Nation” Monday.
“It is still quite bullish in the medium term as it has just broken out to new record highs,” Newton said. “I think we still have a way to go. In the short term, my cycle composite will peak at the beginning of January.”
Bitcoin’s weekly chart and relative strength index reflect rising interest in the world’s largest digital currency, mainly from institutional investors, Newton said.
Google searches for bitcoin are up about 750% year over year, but still “nowhere near” their 2017 highs, the charts analyst said.
“[With] Right now, you can make money with SPACs at 10, 15, 20% a day, “he said.” I just don’t think investors are in the mood for crypto when the institutions are definitely moving in that direction. “
Newton’s other chart – which uses three different bitcoin cycles, the main one being 273 days, to track changes in the cryptocurrency’s path – hints at an impending turn towards bitcoin.
“All those years when we had a great Q4, we reversed the trend in late December, early January, and went even lower,” he said. So I think there will be an opportunity [for] investors to be able to buy dips in crypto and bitcoin in particular. “
Newton, who is long bitcoin, ethereum, litecoin and several other digital currencies, said he would like to sell his positions “in the next one or two weeks.”
“I think there will be an opportunity to buy dips in the first quarter next year,” he said.
Boris Schlossberg, director of FX strategy at BK Asset Management, said the institutional interest in bitcoin “bodes well for the assets.”
“Can it go up to $ 50,000? Absolutely,” he said in the same “Trading Nation” interview, warning that “if you want to actively trade or invest this, you have to have the mindset that it has a tremendous amount of mobility.”
“As for the final valuation, it’s impossible to say, but one interesting measure: if you look at the tulip mania, at the height of the tulip mania, one tulip was essentially worth about one house,” said Schlossberg. “If you do use those kind of appraisals then 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 quite a lot of potential, but there will certainly be tremendous volatility as we get there. ”
Disclosure: Newton is long bitcoin, ethereum, litecoin and several other cryptocurrencies, along with closed-end trusts for bitcoin cash and ethereum.
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