Bitcoin (BTC-USD) has been on the mend lately, rallying almost 10% over the last three sessions. Just when it looked like the cryptocurrency was going to roll over to new lows, it has come back to life. So have other cryptocurrencies, like Ethereum (ETH-USD). So, how high can it go? While it is not going to get there in a straight line, one well-known fund manager sees seven digits on the horizon for Bitcoin.
Ark Investment Management’s Cathie Wood recently said that she believes Bitcoin can reach $1 million by 2030. To get there, the cryptocurrency will need some big-time buyers — and more than just retail traders. Specifically, she says high-net-worth individuals and institutions will help drive demand.
When we think of corporations that own Bitcoin, many investors think of Tesla (NASDAQ:TSLA) and Block (NYSE:SQ). Tesla reportedly owns about 43,200 Bitcoins, while Square has purchased $220 million worth, or an estimated 8,027 coins. However, the biggest player in the game is MicroStrategy (NASDAQ:MSTR), which owns a whopping 129,218 coins. It recently purchased 4,167 Bitcoins, with the total average price per coin now sitting at $30,700.
At the Miami Bitcoin 2022 conference, Cathie Wood reiterated her Bitcoin price target by stating that cryptocurrency is a “great hedge against inflation.” While Wood’s $1 million target is several years out, I also want to look at the short-term action for Bitcoin.
Source: Chart courtesy of TrendSpider
Just because Bitcoin has enjoyed a couple of good days and because a mega-bull is looking for more long-term upside, doesn’t mean the asset is a buy right here, right now.
Looking at the chart, the recent rally was enough for Bitcoin to reclaim the 10-day moving average. However, it is still struggling with the 50-day and the midpoint of the current channel. If it can push through these measures and the 21-day, then it opens the door back to the $45,000 level. Above that and the 200-day moving average, channel resistance is in play.
On the downside, a move back below $40,000 puts this month’s low in play, followed by a potential test of the $37,000 to $37,500 area. So, while the bulls may remain optimistic for the long-term, traders must take the technicals into consideration over the short-term.
On the date of publication, Bret Kenwell did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
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