It has been a busy couple of weeks for bitcoin.
After hitting a new all-time high above $61,000 on March 13, Morgan Stanley (NYSE: MS) became the first big bank in the U.S. to open up bitcoin funds to its wealth management clients with “an aggressive risk tolerance” and at least $2 million in the bank.
Shortly there after, Tesla (NASDAQ: TSLA) said customers were now able to purchase their next vehicle from the company with bitcoin, and PayPal (NASDAQ: PYPL) said its customers could now use cryptocurrencies to pay for things via its platform. Fidelity also applied to launch a new Bitcoin ETF last week, becoming the most prominent company to enter the competitive race to offer investors a new option for trading the world’s largest digital coin.
And then on Wednesday, Goldman Sachs (NYSE: GS) followed Morgan Stanley’s lead and said it will soon offer its first investment vehicles for bitcoin and other digital assets for its private wealth management clients.
But even with all these recent catalysts, bitcoin hasn’t been able to push past that March 13 high and sits at $58,774 at the time of writing.
“I think most of these things are very gimmicky right now,” said Boris Schlossberg, managing director of FX strategy at BK Asset Management, adding that “the whole rally in crypto is getting very long in the tooth.”
Bitcoin has been on a tear this year, gaining 102% year-to-date. And after hitting new record highs seemingly every day for weeks up until mid-March, Schlossberg believes the uptrend in bitcoin may soon run into resistance.
“I think we’re very, very close to perhaps an intermediate-term top here,” Schlossberg said. “A little bit of a correction is certainly due at this point.”
Miller Tabak’s Matt Maley agrees that bitcoin is likely to see a correction, and says the key level to watch will be $52,000.
“If it breaks below that level, it’s going to be a big warning flag,” Maley said, noting it would be its first lower low of 2021 following months of higher highs and higher lows.
“However, right now, with that series of higher highs and higher lows, I think the [path] of least resistance is higher,” Maley said. “So, if it breaks above its recent highs of $61,000, it should see another leg higher. That said, I do agree with Boris. In a very volatile situation, it’s going to see a lot more big declines along its way.”
Bitcoin “may change the world, but Amazon (NASDAQ: AMZN) changed the world,” Maley added. “It still saw a lot of deep corrections as well.”