CRYPTOCURRENCY WEEKLY MARKET ANALYSIS — BITCOIN COULD BE CLOSE TO A SHORT-TERM TOP
Publicly traded business intelligence firm, MicroStrategy was the first listed company in August to dump US dollars and keep Bitcoin in its treasury. The company had invested about $475 million at that time. On December 5, the company announced another purchase of 2,574 Bitcoin worth about $50 million. The company’s total investment of $525 million has risen to about $784 million at current levels. Continuing with its bullish view on Bitcoin, MicroStrategy has announced a $400 million convertible senior notes offering, which the company plans to invest in Bitcoin.
BITCOIN VALUE FUNDAMENTAL ANALYSIS
While the initial purchase was a brave move that started the rally, the latest move gives an impression of institutional FOMO, which is a negative sign
It is not only MicroStrategy, even other institutions are aggressively buying, which has boosted Grayscale’s Bitcoin Assets Under Management to over $10.5 billion. And it is not only Bitcoin that has attracted investor’s attention. Grayscale managing director Michael Sonnenshein said that several investors are buying Ethereum only. This is a positive sign.
But why are institutional investors FOMOing when Bitcoin’s price is near $20,000? That is because several institutions believe that Bitcoin is still in its early stage of adoption and the price will be much higher in the next few years.
Legendary investor Paul Tudor Jones, in a recent interview with Yahoo finance, said: “Bitcoin reminds me so much of the internet stocks of 1999 because the internet was in its infancy. No one knew how to value it because of the world of possibility that lay ahead.”
While the long-term story is clearly bullish, the short-term sentiment seems to be reaching a frenzy among institutions, which could result in a short-term top. Let’s analyse the charts of the top-5 cryptocurrencies to determine the path of least resistance.