Cryptocurrencies have rallied in recent weeks after a long slump.TrendSpider’s Jake Wujastyk said on Wednesday that he expects bitcoin and ether to rise further.He shared the indicators that lead him to believe the cryptos will surpass all-time highs.August has traditionally been a weak month for cryptocurrencies .
“Out of the last five years, August has only closed higher than July’s close one out of those five times,” Jake Wujastyk, chief market analyst at charting software firm TrendSpider, told Insider on Wednesday.”So historically speaking it is a pretty weak time of year.”
But this August has been different so far.The prices of cryptocurrencies broadly reversed course in July after a months-long slump and have mostly kept up their momentum into this month.
Since the first of the month, bitcoin is up 14%, Ether is up 23%, and Binance coin is up 12%.
According to Wujastyk the rally is just getting started, particularly for the two biggest cryptocurrencies by market cap — bitcoin and ethereum.
A few different indicators — laid out in the charts below — lead Wujastyk to this conclusion.The charts show weekly highs and lows for each asset.
The bottom of the vertical red and green lines show the low for each week, while the top show the weekly highs.The horizontal lines, or arms, on each line, represent average volume in the first and second halves of each week, while the red and green shading around the lines represent trading volume and the corresponding pricepoint.
First, the chart for Bitcoin:
TrendSpider And Ether:
TrendSpider In his analysis, Wujastyk is looking at the assets’ recent price surges above their volume weighted average prices since their May highs.Volume weighted average price is the mean of all the pricepoints at which an asset was bought, taking into account the volume of the asset traded at various pricepoints.
Both bitcoin and ether have been significantly breaking above their average prices — represented by the blue line in each chart — in recent days.Wujastyk likes to put a 7.5% band above the average price line as a threshold for significance, illustrated in the bitcoin chart by the dark red line above the blue line.As you can see, bitcoin has broken above this level.
“The fact that it is gaining steam above this important threshold does show that it’s probably turned a corner here and is possibly ready for all-time highs,” Wujastyk said specifically about bitcoin, though he said the same applies to ether.”That’s where I think they’re going.”
Second, Wujastyk is looking at the pick up in trading volume at current price points .
This is shown by the green shading around the top of the most recent weekly line.The shading growing wider toward the top of the line shows that momentum is picking up and that buyers are willing to buy more as prices increase.
Wujastyk said that his technical analysis leads him to believe that both bitcoin and ethereum will hit all-time highs by December 2021 or January 2022, putting bitcoin above $63,000 and ethereum above $4,100.He added that they could go higher in the long-term, but that trends would have to be re-assessed after surpassing these previous highs.
Wujastyk isn’t the only one who sees bitcoin and ether hitting new highs in the near-future.Other experts Insider has spoken with in recent weeks have also issued lofty targets.
Technical analyst Adrian Zduńczyk , for example, told Insider he sees bitcoin going as high as $120,000 in the next five months.While he was still at Fundstrat, Grayscale’s new digital asset manager David Grider said that he thinks bitcoin will hit $100,000 and ether $10,500 by the end of 2021.And David Gokhenstein , the CEO of digital currency payment firm PAC Protocol, believes bitcoin will go to $85,000 and ether to $12,000-$14,000 by year-end.
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