Bitcoin Price Prediction: $20,000 Breakout Expected As MCTC Signals Bullish Run, Report Suggests

KEY POINTS

The MCTC ratio measures Bitcoin's market cap with the total miner revenue since the beginning
The current ratio is on the same level as in 2017 before the massive price rally
Short-term forecasts are bearish for Bitcoin, but long-term forecasts say the opposite

As Bitcoin continues its struggle to reach $20,000, a key indicator shows that a breakout is still possible for the benchmark cryptocurrency.

A weekly report from Stack Funds, a crypto fund provider, suggested that Bitcoin's market cap to thermo cap ratio (MCTC) was showing signs of repeating its 2017 performance when the cryptocurrency rallied from $1,000 to $20,000 in just one year.

The MCTC ratio is the market cap of Bitcoin divided by the miners' total revenue since the beginning (or the thermocap), Cointelegraph said.

In the chart shared by Stack Funds, the current MCTC is at 17. This number was the peak MCTC in 2019 but during the 2017 bull run, it went up to as much as 70.

Crypto fund provider, Stack Funds, believes BTC is currently undervalued according to the BTC Market Cap to ThermoCap ratio (market cap/total miner revenue). The ratio sits at the 17 level the same level which BTC whipsawed before making new ATHs in '17. https://t.co/zbazaW50T0 pic.twitter.com/POaf0rLOpQ
— BKCoinCapital (@BKCoinCapital) December 10, 2020

At 17, the MCTC ratio is still at its lower band. "We are skewed to believe accumulation opportunities persist, but not for long before the $20,000 price breakout materializes," the Stack Funds report said.

Bitcoin closed Thursday at $18,253, erasing all the gains it made since it hit $19,713 on Nov. 30. The rebound that traders hoped to happen did not materialize. So, all eyes are now on the first support at $17,700

In a previous report, Cointelegraph said there is little buy support at the top, with significant buyer interest only at $16,200. The rejection of $20,000 at the end of last month also intensified the selling pressure.

Trader and analyst Michael van de Poppe said a possibility of correction is imminent.

Third test of support & breakdown.

Testing levels multiple times doesn’t make the level stronger.

Downtrend likely to continue? I think so, unless $18,500-18,700 is reclaimed, I think we’ll continue correcting. $BTC
— Michaël van de Poppe (@CryptoMichNL) December 9, 2020

Many attributed the decrease in price to whales – holders of large quantities of Bitcoin – keeping their BTC in exchanges lately. Also, short-term traders might be looking for opportunities to sell while Bitcoin was at its peak price. "An 80% increase in Bitcoin price over only two months might be a profit too tempting not to take," Lucas Huang, head of growth at Tokenlon exchange, told Coindesk.

While the short-term forecast is bearish, the long-term predictions are still bullish. Tyler and Cameron Winklevoss, owners of Gemini Exchange, are bullish that Bitcoin would one day be worth $500,000.