Bitcoin Price Unlikely To Hit $20,000 By Year-End: Here's Why

Despite positive sentiments and a number of bullish news, Bitcoin's chance of reaching $20,000 by the end of the year remains low.

Data from analytics firm Skew suggests that there is only a 10% probability of Bitcoin reaching $20,000 by Dec. 31, 2020. "A below 10% probability of record highs by the year-end means the market is unconcerned with that outcome," Vishal Shah, founder of derivatives exchange Alpha5, told Coindesk.

Bitcoin needs to rally 50% from the current price in order to reach $20,000 by the end of the year. With only around 60 days left, options traders do not see that becoming a reality. This means these traders are not affected by any bullish price predictions on the spot market.

CF Benchmarks CEO Sui Chung said the options market was not getting carried away with the recent price momentum. He told Coindesk that extrapolating Bitcoin's price action and volatility in the last three months of the year would translate to a Bitcoin price of around $14,000 or $15,000.

In the options market, the purchaser gets the right to buy or sell an underlying asset at a set price within a set date, but they do not have the obligation to pursue with their buy or sell. In a call option, the owner gets the right to buy while in a put option, the owner gets the right to sell.

Some analysts think the options market is underestimating Bitcoin's tendency to move wildly, especially after periods of very low volatility. They say it can reach higher prices if Bitcoin makes a record move in the next few weeks.

Bitcoin closed at $13,460 Thursday after a drop from the previous day's $13,780. There appears to be a strong support at the $13,000 level as Bitcoin has stayed above that psychological resistance for the past six days. Analysts would continue to observe the price of Bitcoin ahead of the upcoming U.S. presidential elections.