After rocketing more than 100% off its March lows, bitcoin tumbled on Wednesday by 7%. This move downward came after 50 bitcoin from the Satoshi-era was spent for the first time since August 2017. Some bitcoiners panic-sold on fears that Satoshi had started dumping his coins on crypto exchanges.
Bitcoin fell from above $9,700 to $9,100, liquidating at least $40 million worth of BitMEX longs in its wake. The flagship cryptocurrency is now sitting at a precarious position at $9,019 as the bulls and bears wrestle it out. While the bears look like they have the upper hand now, some impressive and significant fundamental factors signal potential upward momentum which puts June 2019’s high of almost $14,000 within the realm of possibility. This is according to a report by leading crypto investment firm BlockTower Capital.
Fundamentals That Could Fuel Bitcoin Growth
On a comprehensive post, BlockTower Capital outlined some core fundamental catalysts that could fuel the demand for bitcoin thus pushing the BTC price to its 2019 highs and igniting a full-blown recovery in the coming months.
Firstly, BlockTower notes that investors are getting accustomed to the high volatility in the crypto markets. Notably, the S&P 500 and bitcoin shed almost the same amount of value on the same day during the March mayhem. This makes bitcoin less worrisome if traditional assets can display similar wild price swings. According to the investment firm, the market has acknowledged this fact and that’s why there is a real demand for bitcoin (evidenced by its stellar performance YTD compared to other assets).
Moreover, BlockTower opined that the world is increasingly accepting digital technologies amid the virus. Right now, digital companies are among the few ones that are thriving. People are likely to smoothly transition to digital money when this is all over. And with bitcoin being the internet’s first money, it “fits neatly into a picture of the post-COVID-19 world.”
BlockTower then reiterates the point that every expert in the industry is wary about: the incessant money printing by central banks. Banks are currently injecting trillions into the stressed system. These actions are sure to throw the world into a deep abyss of inflation. Bitcoin, with its hard-capped supply, stands to benefit from people’s fears of currency debasement.
People across the globe are carefully looking at the steps that the central banks are taking to stave off coronavirus effects. This has led to a gradual erosion of trust in the banking systems as they realize that the banks have been unable to stop the economic bleeding. Undeniably, this will play a vital role in boosting bitcoin adoption.
The researchers at BlockTower also cite the US-Sino trade war 2.0 as another catalyst that will fuel bitcoin’s growth. A new US-China trade war is on the cusp of erupting as the two countries throw blame over the coronavirus pandemic. Worth noting that this trade war between the two superpowers triggered a bitcoin rally last year as it escalated.
With These Catalysts On The Horizon, $14,000 Looks Likely
The report by BlockTower posits that the aforementioned fundamentals paint a very bullish picture for the bitcoin price in the future. As of now, however, the bulls have slowed down after the run last week.
Bitcoin pushing above $10,500 in the near-term would signify that there is new money demand for BTC. Additionally, “a break of that high, and the next target would be the 2019 summer high of $14,000,” BlockTower Capital observed.
Based on these robust fundamentals, it appears that the ongoing selloff might not continue for so long. The next bull market should be pretty exciting for the flagship crypto.
Get Daily Crypto News On Facebook | Twitter | Telegram | Instagram
DISCLAIMER Read MoreThe views expressed in the article are wholly those of the author and do not represent those of, nor should they be attributed to, ZyCrypto. This article is not meant to give financial advice. Please carry out your own research before investing in any of the various cryptocurrencies available.