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Mohit Sorout Says $20K Bitcoin Possible In 3 Months



Mohit Sorout, the cofounder of Bitazu Capital, a cryptocurrency hedge fund that focuses on momentum algorithmic trading, says that Bitcoin could rise to a new all-time high in three months when it breaks from its existing range.

The price of the asset has been playing within a tight range for a couple of months now, and the analyst claims that a record-high would be impending. The 15% range recorded since July 2020, shows the price of BTC ranged between $10,200 and $11,800. 

History shows that when Bitcoin stays stable for a long time in a tight price range, a major price movement usually occurs.

It is not clear whether a breakout will occur in the near term, or whether it will occur at all but if it does, Sorout says it will take three months for BTC to hit $20,000.

Sorout’s Three-Month Theory

From previous price cycles, Bitcoin moves faster after a long range, with the pattern applying to both breakouts and breakdowns.

From May 1 to July 20, Bitcoin ranged between $8,800 and $9,800 and stabilized at around $9,100. After two months of consolidation, it took BTC 12 days to record a 32% rally to $12,123 on Binance.

Strout aired these sentiments through this tweet

 

Replying to questions on why he thought that three months was the magic time frame, not longer or shorter, Sorout said that it was an observation based on how violent the rallies are after subdued periods of volatility. 

Factors That Could Strengthen BTC’s Uptrend 

There has been a strong narrative around a Bitcoin bull cycle in Q4 of 2020 and heading into 2021. This is supported by an upsurge of institutional demand for the asset.

After the U.S. Commodities and Futures Trading Commission charges against BitMEX, overall futures open interest dropped, and could lead to a more stable and gradual uptrend for Bitcoin, unlike past bull cycles.

Also, on Oct. 17, Barry Silbert, the CEO of Grayscale said that the firm hit a record-high assets under management at $6.4 billion, tweeting  that the firm saw big inflows this week.

Institutions that have been acquiring Bitcoin such as Square and MicroStrategy said they perceive BTC as a potential treasury asset. That could translate that many institutional investors are accumulating the asset without plans to sell in the near future.

Although the price of BTC has been relatively stationary throughout October despite the high institutional inflows, Stock-to-Flow (S2F) creator, PlanB said through a tweet that asymmetrical returns might occur over time. 

Image courtesy of pixabay



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