Are strong technicals enough to bring Bitcoin price to $100K in 2021?

After scaling up to a relative high of around $53,000 just over two weeks ago, it seemed as though Bitcoin (BTC) was well on its way to reclaiming its former all-time highs. However, the series of events that unfolded over the past week has seen the world’s largest cryptocurrency by total market capitalization lose nearly 13% of its value, with a single BTC currently trading near $45,800.

That said, the aforementioned volatility seems to have left Standard Chartered’s cryptocurrency research unit completely unfazed, with the analysts referring to Bitcoin’s most recent plunge as being a “false dip” while reiterating that a year-end target of $100,000 per BTC is still quite achievable for the flagship cryptocurrency.

The banking behemoth believes that Bitcoin will have hit $100,000 by “late 2021 or early 2022,” a move that will be accompanied by a huge spike in the value of Ether (ETH) as well. In fact, the research team pointed out that Ether is “structurally” valued at a year-end price point between $26,000 and $35,000, however, in order for that to happen, BTC must scale up to $175,000. 

Contributing factors

To get a better idea of whether a year-end projection of $100,000 per BTC is still feasible, Cointelegraph reached out to Ben Caselin, head of research and strategy at cryptocurrency exchange AAX. In his view, last Tuesday’s sell-off was a classic “sell the news” move, adding that he believes that an elaborate “bear trap” may have been at play. Caselin told Cointelegraph:

“I do expect $100K is still in play for Bitcoin this year — if anything, $100K would be underwhelming. In fact, if we follow PlanB’s stock-to-flow, we are still moving in the lower band, tracing ‘worst-case-scenario prices,’ which stood at $47K last month, $43K in September, and no less than $135K at the end of the year.”

He added that when it comes to Bitcoin, there is more value in looking at on-chain data rather than price technicals alone, as it allows users to gain a more high-resolution view of what’s actually happening across the network in real-time. 

Similarly, Tommy Schreiner, senior research analyst at crypto data provider TheTIE, told Cointelegraph that there is still a healthy chance that Bitcoin can reach $100,000 by the close of 2021:

“$100K seems as ridiculous perhaps as $50K did last year, but there are factors in play that don’t completely out-rule that scenario. The recent pullback was mostly a de-levering of the market, as a large percentage of leveraged open interest got wiped out and effectively reset all the bullish traders who were going YOLO.”

Schreiner further emphasized that despite all the economic turmoil across the globe, the United States Federal Reserve has shown no signs of stopping the money printer, something he believes to be a good sign for relatively riskier assets such as cryptocurrencies. 

Furthermore, he highlighted that layer-one solutions such as Solana, Terra, Avalanche, Polygon and Fantom have continued to bring in new money into the global digital asset ecosystem in recent months, something that may also help spur BTC’s value. 

“NFTs [nonfungible tokens] are burning a huge amount of Ethereum every day, despite pricing out a lot of retail users. So if $100K seems ridiculous, perhaps look at how far crypto has come in just a year,” Schreiner said.

Nick Spanos, co-founder of Zap Protocol, believes that El Salvador’s recent acceptance of Bitcoin as legal tender has the digital currency well on its way to hitting the $100,000 mark by the end of the year. “Ether is also looking to hit $10,000 by then,” he said.

Some doubts for $100,000

Lennix Lai, financial markets director at cryptocurrency exchange OKEx, believes that while Bitcoin’s future seems poised for good things, that doesn’t necessarily mean the premier digital currency will close out the year at $100,000. He told Cointelegraph:

“I think we would see a short-term correction considering the loom on upcoming tapering from the U.S. Bitcoin is still very sensitive to the global money supply. Yet at the same time, the cryptocurrency is becoming a legitimate alternative asset class and everyone is looking for certain portions of asset allocation.” 

Lai did concede that if in the near-to-mid future even if 1% of the world’s total wealth were to flow into Bitcoin, then a price target of $100,000 per BTC could quite easily be attained.

Similarly, for Igneus Terrenus, head of communications at cryptocurrency exchange Bybit, the most compelling case for Bitcoin’s price reaching $100,000 this year remains the approval of a Bitcoin exchange-traded fund (ETF) in the United States, which, in his opinion, will help open up the BTC market to new participants, such as retirement funds and wealth management products. 

“SEC punted the [BTC ETF] decision from Sept. 8 down to its new date of Nov. 14 — still within the calendar year of 2021. Anecdotal evidence shows that almost all wealth managers are asked by their clients about Bitcoin exposure. An ETF may just be the right vehicle for this to happen,” he told Cointelegraph. 

Bitcoin’s technicals look strong

In spite of recent volatility, Bitcoin’s fundamentals seem to be quite strong at the moment. In this regard, Charles Edwards, creator of one of the world’s most well-known Bitcoin metrics, Hash Ribbons, recently claimed that as long as the flagship cryptocurrency is able to hover above its all-important $42,000 resistance zone, it will continue to remain in the green.

Late last year, Edwards predicted that by the end of 2021, Bitcoin could be looking at a price target of between $100,000 and $200,000. He said he would be “shocked” if Bitcoin didn’t hit $50,000 in 2021, a projection that came true after the currency reached its all-time high of $63,000 earlier this year.

In Edward’s view, one of the most important differences between this current rally and previous ones is the comparatively low level of retail interest that has been witnessed across the board. In fact, to reach a new all-time high this year, he believes Bitcoin will have to spend a considerable amount of time above the $50,000 range. “I think that would reengage more retail interest,” he said.

Even though $100,000 may not be in the cards for Edwards, he believes the market is slowly but surely closing in on the price point. However, in order for that to happen anytime in the coming three to four months, he believes that either renewed retail interest needs to be generated or a significant number of purchases from leading S&P 500 companies like Tesla need to take place.

Looking ahead

When compared with previous events, the monetary effects of the 2020 halving have been quite tame up until now, with Bitcoin having only experienced a 4x increase in its value. In comparison, we can see that in the years following the 2012 and 2016 halvings, BTC’s value rose by 55x and 15x, respectively, thereby suggesting that a move to $100,000 could still be possible.

It will be interesting to see how the coming few days play out for the cryptocurrency market at large, especially as regulators all over the world continue to tighten their grips on this still-nascent industry.