KEY POINTS

  • Technical analysis indicates Bitcoin is currently in a long-term price consolidation, says Abra CEO Bill Barhydt
  • He says the benchmark cryptoccurency is having a 'psychological momentum'
  • Bitcoin is highly volatile but it has remained within the range of $10,000-$11,000 for more than a month now

Even when Bitcoin's current price behavior is turning many traders into bears, Bill Barhydt, the CEO of payments and mobile cryptocurrency wallet Abra, said he is more bullish about the benchmark cryptocurrency primarily because of technical and macro factors.

"I've never been this excited about the potential of #Bitcoin for significant price appreciation in the short term (less than 18 month time frame.)," he tweeted on Tuesday.

In a series of tweets, Barhydt first spoke about technical indicators that make Bitcoin a perfect hedge against inflation.

Bitcoin is highly volatile but it has actually remained within the range of $10,000 to $11,000 for more than a month now. "Bitcoin has been less volatile than many stocks this year while its price has appreciated over 25% in 2020," Barhydt said in a tweet.

He said he is optimistic about Bitcoin as the "long term price chart is showing a super bullish descending triangle (continuation) pattern off the Jan 2018 highs." His view is similar to what other traders like Credible Crypto had observed. In May, Credible Crypto said the price chart of Bitcoin-Tether trading pair was consolidating since 2017's all-time high, Cointelegraph reported.

Bitcoin is also having a "psychological momentum", the CEO said, adding that the current non-technical factors would have an effect on Bitcoin in the long run.

First, he said Bitcoin is currently held by a small number of wealthy early adopters. "Even a small increase in this holder base would cause significant price appreciation." He pointed out that many institutional investors active on Bitcoin today were not there in 2017, the year Bitcoin's price went up to near $20,000.

Barhydt noted that an article from Coindesk has reported about the recent "promotion" of Bitcoin by the Chinese State Media, who called Bitcoin as this year's top-performing asset. 

Finally, Barhydt said the most important bank regulator in the U.S., the Office of the Comptroller of the Currency (OCC), has a Bitcoin and fintech-friendly head. He is referring to Brian P. Brooks, currently the acting comptroller of the currency. He previously served as chief legal officer of Coinbase, one of the most popular cryptocurrency wallets in the country.

These factors, Barhydt said, make him more bullish on the short-term price appreciation of Bitcoin. In a follow-up tweet, he said it's important or everyone to only invest in cryptocurrencies the amount they are "comfortable losing".

Bitcoin In this photo illustration a visual representation of the digital currency Bitcoin sinks into water in London, England, Aug. 15, 2018. Photo: Dan Kitwood/Getty Images