There have been a plethora of lofty predictions circulating throughout the crypto industry regarding just how high Bitcoin could rally in the years ahead
Although many investors are calling for a six-figure BTC in the near-term, one analyst is noting that the daily volume required to push the crypto into this region would be too significant
The lack of organic money flowing into the market is another major factor that could stop these predictions from coming to fruition anytime soon
Ever since Bitcoin’s capitulatory decline from its 2017 highs of nearly $20,000, investors have been setting their sights on sky-high targets expected to be reached during the crypto’s next major uptrend.
Some popular models frequently cited by investors suggest that BTC will reach $100,000 in the months ahead, with it seeing even further upside after that.
There is a simple reason why these predictions aren’t – for the time being – reasonable, as the daily trading volume required to sustain a push up to these highs is significant, and the lack of fresh capital flowing into the market makes it presently impossible.
Bitcoin Unlikely to Break into Six-Figure Price Region Anytime Soon
Throughout the past couple of years, multiple models that predict Bitcoin will be trading well-within the six-figure price region in the near-term have surfaced, drawing significant attention from embattled investors.
One prominent example of this would be Bitcoin’s Stock-to-Flow (S2F) model, an extremely popular economic model that suggests the benchmark cryptocurrency will be trading at roughly $100,000 by the end of 2020.
Bitcoin’s S2F model via PlanB
There are other models that offer similarly bullish near-term price predictions for BTC, but one respected analyst is now questioning how reasonable it is to assume that the crypto will be trading within the six-figure price region in the coming couple of years.
“My issue with BTC at $288,000 in 2021 is not the price – I believe it’s true value is higher – it’s the daily volume required up there. $1/4bil to cover the output alone. Today it’s $14.4mil. In the middle of the largest liquidity crises the world has ever seen,” he noted.
Lack of Fiat Inflows a Grave Sign for BTC’s Mid-Term Growth
In addition to lacking the daily volume required to climb to the price levels forecasted by some analysts and investors, the crypto market has also failed to garner any significant fiat inflows from new investors.
This is an integral part of bull runs, and it is impossible for Bitcoin to see any type of parabolic rally to fresh all-time highs without a massive amount of organic money flowing into the market.
Another analyst questioned how realistic it is to assume that the crypto market will see any fresh fiat injections anytime soon while global unemployment rates skyrocket.
“Every BTC bull market has been built on organic money flowing in from the masses. Bitcoin, to get to the highs being talked about, needs millions of people around the world buying some to propel it. Where is that coming from right now when everyone is locked inside w/out jobs?”
Featured image from Unplash.