- Tesla’s announcement helps Bitcoin gain 65% within a month
- Bullish trend established inside bullish channel and on chain metrics bullish
- Lagging indicator is above past price and has clear space ahead
- Industry experts argue price can reach even $100,000 in 2021
- RSI divergence could indicate a short term correction could be in the cards.
Last week, Bitcoin made new record highs after Tesla CEO Elon Musk tweeted Tesla has acquired $1.5 billion worth of Bitcoins as part of their overall cash management strategy and that the company will accept Bitcoin as payment in the near future. Following the news, Bitcoin price broke previous resistance R1 (now support at S1) at $40,000 and made new record highs around $48,000 while gaining over 65% in less than a month.
Tesla’s move comes after various companies like MicroStrategy and Square had previously announced similar transactions albeit of smaller scale. The significance of Tesla’s move sent ripples in the crypto industry as many Bitcoin critics have argued Bitcoin fees made it very expensive for commercial use and disputed it’s value as an asset that stores value. Already many funds and companies are adopting Bitcoin as a must-have asset in their portfolio of investments and cash management strategy and Tesla’s recent move made that evident.
On another note, various on chain metrics of February suggest that Bitcoin still has room to go, based on large whales and institutions investing large amounts in Bitcoin. Meanwhile, the adoption rate of Bitcoin has reached the adoption rate of the Internet in 2005 as reflected by the number of unique addresses in the network.
On the technical side of things, Bitcoin price is moving inside an established bullish channel, above the Ichimoku cloud indicator, with the lagging line having much needed space above past price action, which is a requirement for a healthy trend. The only cloud on the sky remains the RSI bearish divergence that could indicate that a correction inside the channel could be in the cards sooner or later. Many market analysts and experts argue that 2021 could be the year Bitcoin could reach $100,000. Limited supply, an ever rising difficulty and cost to mine together with record level adoption are some of the reasons behind Bitcoin’s price gains. Can it reach $100,000? Many industry experts say so, but only time will tell if they are right. For the moment the bullish trend is intact.
