Mohit Sorout is convinced that Bitcoin will reach a new record high in just three months.
Bitcoin (BTC) has been trading in a tight price range for several months, with Mohit Sorout, one of Bitazu Capital’s owners, now predicting that a new record high is imminent as soon as the crypto-currency can break out in an upward direction.
Since July 2020, Bitcoin has been priced between $10,200 and $11,800, which is a 15% price range. Since then, the exchange rate fluctuations have remained within limits, with only occasional peaks in between.
Every time Bitcoin remains stable within a narrow price range over a longer period of time, a significant upward or downward price movement follows.
However, whether a breakout will occur in the near future is currently still uncertain. Sorout is certain that, in the event of an upward breakout, there would be a climb to $20,000 within the next three months, which would also be a new record high for Bitcoin.
The daily Bitcoin chart with a trendline
- Bitcoin course development.
- Record high in three months?
Looking at the historical price development it becomes clear that Bitcoin has always moved up or down rapidly after a longer price range.
Thus the market-leading crypto currency lay from 1 May to 20 July of this year between 8,800 to 9,800 US Dollar, whereby the exchange rate settled around 9,100 US Dollar. After just under two months of sideways movement, Bitcoin then soared by a record-breaking 32% within just 12 days and even climbed as high as US$12,123 on the Binance crypto exchange.
In view of the fact that Bitcoin makes violent jumps after longer periods of rest, Sorout says:
„This is the calm before the storm. If Bitcoin were to break out of the price range today, we would have cracked the previous record high of 20,000 US dollars within three months“.
When asked how he arrived at the three-month period, Sorout replies that this is merely an observation of previous price cycles.
The jump to the 20,000 US dollar mark could also be achieved more quickly. To this end, he explains:
„This is an observation of how previous climbing cycles have behaved so far after long periods of rest. But it could also happen more quickly“.
However, it should be noted that the open interest of Bitcoin futures is currently lower compared to other climbing games.
Particularly after the American supervisory authority for derivatives trading (CFTC) brought charges against BitMEX, a crypto exchange specializing in derivatives trading, the open interest of the Bitcoin futures has dropped significantly. This could ensure that a coming upswing is rather steady and slow, not erratic.
Year-to-date open interest of BitMEX
Open Interest on BitMEX.
Upwind for Bitcoin in Q4?
One narrative that could support such an upward trend is the increased interest of institutional investors in Bitcoin.
Grayscale CEO Barry Silbert, who heads the largest crypto investment fund, announced on October 17 that his company now manages $6.4 billion. Accordingly, he emphasized that Grayscale has „received a large inflow of capital this week“. Institutional investors, in particular, are using the asset management company’s crypto-fund to invest in Bitcoin. This is clear evidence of increased interest from this direction.
In addition, the narrative is reinforced by the fact that two well-known mainstream companies, payment service provider Square and software manufacturer MicroStrategy, recently entered the market-leading crypto currency with large sums of money.
The S2F model with its latest update
Stock-To-Flow forecast model.
Despite this positive news, Bitcoin has mostly stagnated in October. However, the Stock To Flow forecast model, which in the past has always made relatively accurate predictions about the share price development, also forecasts significant price gains in the coming months. Its inventor PlanB:
„Why does #Bitcoin not go up with the increased institutional interest? Is anyone selling at the moment? The Bitcoin price is currently exactly where it should be, above $10,000 US dollars. We just have to be patient now, then the jump will happen!“