By Samuel Indyk
Investing.com – Bitcoin was relatively steady trading below $47,000 on Wednesday morning with most major cryptocurrencies struggling for direction at the beginning of the year.
In the last 24 hours, Bitcoin is up by around 0.8%. Over the last week, Bitcoin is lower by around 2.5%.
Goldman Sachs says $100,000 is a possibility
In a recent note, Goldman Sachs (NYSE:GS) said that there is a possibility that Bitcoin could reach the much speculated $100,000 level as the adoption of digital assets increases.
The investment bank estimates that Bitcoin is now around 20% of the “store of value” market, which is made up of Bitcoin and gold. In a hypothetical scenario where Bitcoin’s share of the “store of value” market were to increase to 50% over the next five years, the Bitcoin price would increase to just over $100,000, Goldman Sachs said. That would equate to a compound annualised return of 17% or 18%.
Technical View
After trading at a record high near $69,000 in November, Bitcoin is now around 32% below its all-time high.
The world’s largest cryptocurrency by market cap continues to find support in the $45,500-$45,800 area which it has tested on numerous days in the last month.
A break below that support level would open the door to the “flash crash” low from 4th December near $42,600.
A move lower from that level could see a test of the psychological $40,000 support level.
To the upside, the 200-day moving average near $48,000 could act as resistance before the psychological $50,000 level comes into play.
A move above there would see the 50-day moving average act as the next level of resistance at $51,300.
But for now, Bitcoin and other cryptocurrencies remain in a holding pattern as we await the next catalyst for a move in either direction. As OANDA Senior Market Analyst Craig Erlam says, don’t expect that to last for too long.
“Bitcoin remains in a consolidation phase at the start of the year, with $45,500 providing strong support below but $52,000 a step too far above,” Erlam said. “The last week has seen that range tighten, with $48,000 providing significant resistance which hasn't made for the most exciting period for Bitcoin trade, something that I'm sure won't last long.”