Kraken forecasts Bitcoin rally of up to 200% in coming months

Analysts at the Kraken cryptocurrency exchange expect Bitcoin’s price to rise by 50-200% in the coming months. This is stated in the company’s latest report of the company.

Historically, significant moves in Bitcoin’s price are preceded by periods of low volatility, Kraken analysts note. In 12 separate cases, this metric fell to 15-30%, after which BTC’s market value rose on average by 140%.

Bitcoin volatility chart

It is noted that historically August is the third most volatile month of the year.

On July 24, Bitcoin’s volatility reached a 21-month low, dropping to 23%. In late July this metric rose to 45%, and Kraken expects it could exceed 100% going forward.

The report’s authors view this as the start of a new uptrend and expect that over the next several months Bitcoin’s price will rise by 50-200%.

Bitcoin traded above the $11,000 level on only 91 of its 3,636 days (2.5%) of existence at the time of the report’s publication.

Moreover, as shown in the graphic below, at the end of July Bitcoin broke out of the ‘pennant’ it had been in for about two years. In analysts’ view, this also signals support for a bullish scenario.

Experts note a pronounced decline in Bitcoin’s correlation with the S&P 500. If, at the start of July, this measure reached 0.7, by July 20 it fell to -0.05. By the end of the month the correlation rose to 0.53. At the same time, Bitcoin’s correlation with gold, conversely, reached a yearly high of 0.93.

Analysts say this indicates growing investor interest in safe-haven assets amid the economic problems caused by the COVID-19 pandemic. If Bitcoin continues to follow the same trend as gold, some capital moving into safe-haven assets could flow into cryptocurrency.

Earlier, RoboForex’s chief analyst Dmitry Gurkovsky also stated that the market is awaiting a new bullish impulse.

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