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Why One Trader Says Bitcoin Will Be In The 6-Figures Before It Hits Resistance Again

Why One Trader Says Bitcoin Will Be In The 6-Figures Before It Hits Resistance Again

Bitcoin has been surging higher and one trader says the “sky is the limit” from here. This is how high the cryptocurrency could go.

Bitcoin’s wild rally is showing little sign of slowing down after the world’s largest cryptocurrency surpassed $52,000 for the first time late Wednesday.

The digital coin is up nearly 6% at the time of writing to $52.188.73 after hitting a new all-time high of $52,621.84, bringing its returns year-to-date to just under 78%.

As the price of bitcoin surges higher, Wall Street’s biggest investment banks appear to be warming to it. JPMorgan (NYSE: JPM) said late last week that it is open-minded about bitcoin and will make a decision on the asset when a critical mass of clients want to trade it.

“If over time an asset class develops that is going to be used by different asset managers and investors, we will have to be involved,” said JPMorgan co-president Daniel Pinto in an interview with CNBC. “The demand isn’t there yet, but I’m sure it will be at some point.”

A division of Morgan Stanley (NYSE: MS) is reportedly considering adding the cryptocurrency to its list of possible bets, and Goldman Sachs (NYSE: GS) is also showing interest in the coin.

And on Wednesday, BlackRock (NYSE: BLK) jumped in the fray, with chief investment officer of global fixed income, Rick Rieder, saying the firm is beginning to “dabble” with bitcoin.

“Today, the volatility of it is extraordinary, but listen, people are looking for storehouses of value,” Rieder said. “People are looking for places that could appreciate under the assumption that inflation moves higher and that debts are building, so we’ve started to dabble a bit into it.”

“There are a number of reasons why bitcoin is soaring, but what stands out most is the trend that MicroStrategy (NASDAQ: MSTR) started and Tesla (NASDAQ: TSLA) popularized: moving institutional balance sheets into bitcoin to hedge against inflation,” said Nicholas Pelecanos, head of trading at NEM.

As institutional interest helps to fuel the frenzy for bitcoin, one trader says the coin will rise into the six-figures before it hits resistance.

“We’re getting corporate and institutional players entering the market,” said Todd Gordon, founder of TradingAnalysis.com. “I think the sky is the limit. I don’t want to be overly bullish, but just simple technical analysis, you don’t see resistance til about [$170,000].”

Gordon added that with bitcoin’s market cap of near $1 trillion, “where gold is at $10.5 trillion, I think there’s a lot more room to go.”

Gordon isn’t the only one who sees the digital asset surging far higher.

Anthony Pompliano, co-founder and partner at Morgan Creek Digital Assets, said bitcoin could rise to $500,000 in just a few years, and could eventually reach $1 million per coin.

“I think that bitcoin will eventually rise to become the global reserve currency,” Pompliano said. “I think bitcoin will eventually be much much larger than the gold market cap.”

“There were trillions of dollars that were printed and injected into the economy and everyone from individuals to financial institutions and corporations ran around the world looking for the best way to protect their purchasing power, they ultimately decided it was bitcoin,” Pompliano added. “As more and more people come into the market, there is more liquidity. As there is more liquidity, there is more utility. As there’s more utility, there’s more stability in the price… you get kind of this evolution.”

“If you think about that internet economy,” Pompliano continued, “there is no native currency… [bitcoin] will eventually take that set at the kingdom of being that global reserve currency of the internet generation.”

JPMorgan issued a more conservative “theoretical” long-term price target for bitcoin of $146,000, saying that the digital asset is beginning to develop a reputation as a next-generation “safe haven.”

“Bitcoin is competing with traditional gold, bitcoin is a form of digital gold,” JPMorgan global markets strategist Nikolaos Panigirtzoglou said, adding that the cryptocurrency has “five times more volatility than gold.”

Still, Panigirtzoglou warns that bitcoin’s current rally “looks unsustainable” unless volatility eases.

“Movements since January this year appear to have been more influenced by speculative flows,” Panigirtzoglou said. “The faster the pace of institutional adoption, the quicker that convergence in volatility will take place. The biggest risk is that the flow implies we’ve seen over the past months slows materially from there. In particular when the economies reopen, people go back to the office, they have less time to trade at home, and as a result some of that, retail… flow impulse slows from here.”

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