Archive August 2020

Bitcoin rises to over $12,000 and supporters already announce a new era

btc-frog

Bitcoin kicked off this week with a rebound, advancing beyond $12,000 to its highest level in more than a year and a half. The world's largest cryptocurrency grew 5.3% to about $12,473 in New York, the largest increase since July 2019, reports Bloomberg.

Peers, including Bitcoin Cash, Litecoin and Monero, also won, with the Bloomberg Galaxy Crypto Index reaching its highest peak since June 2019.

After trading sideways for much of the summer, Bitcoin rebounded at a time when a rise in the stock market pushes the S&P 500 close to a new historical record. And in an environment of ultra-low rates, several analysts and fans of cryptocurrencies say that Bitcoin - along with other assets such as gold - could take on itself as a hedge against inflation if prices start to rise.

"Inflation is low, but real yields are generally negative - negative real yields and monetary stimulus/spending have led investors to look for inflation hedges, like gold," said Seamus Donoghue, vice president of sales and development for METACO's business to 'Bloomberg'.

"Due to its limited supply and growing institutional acceptance, Bitcoin is also likely to benefit from the market that seeks protection against inflation," added the expert.

Bitcoin's advance beyond $12,000 makes it one of the best performing asset classes this year, having gained around 70% since late December and up more than 100% since mid-March when it was briefly traded below $4,000.

The increase registered this year still leaves it about 40% below the historical record of almost 20 thousand dollars reached in December 2017.

This week the $12,000 Bitcoin barrier could be breached

bitcoin-sky-limit

Bitcoin's price continues to encounter resistance at the $12,000 level. Will the bulls overtake him before the weekly close?

Typically, for Bitcoin (BTC), weekends are marked by reduced trading volume, as day traders take a break and CME's Bitcoin markets are closed.

Experienced traders also know that the exchanges' order portfolios shrink over the weekend, providing opportune times for Bitcoin's smart 'whales' to exploit these gaps and influence the price through volatility.

This Saturday, August 15, things are different, as the scenarios mentioned above are not preventing traders from making a new push for the $12,000 mark.

If the current move to the key level fails, it will be the second time in a week, and for some analysts, multiple rejections at a key resistance level could be a bearish signal.

On the other hand, there is also an equal number of traders who will argue that several new tests of a key resistance level increase the chance that it will be violated in future attempts.

BTC/USDT daily chart. Source: TradingView

Some positives for the Bitcoin price are: the daily chart continues to show a pattern of higher lows, the RSI is in the bullish territory (66) and traders show a strong interest in buying in each fall, as shown by the increase in the volume of purchases on a daily basis.

In the event that traders manage to close a candle 4 hours above $12,000, Bitcoin will need to seek a daily high above $12,068 and $12,123, so things will be quite interesting.

For now, we can see that the price is simply compressed in a narrower range within the streamer and the drop in the lower trend line is expected to be supported by the high-volume VPVR node stretching from $11,730 to $11,500.

Normally, a drop in such a streamer would justify some concern, but given the buying interest shown since July 28 and still on March 12, it appears that the bulls will eventually be able to reach $12,000 in the short term.

Bitcoin daily price chart. Source: Coin360

While Bitcoin struggled to resume the $12,000 level, altcoin performance has been somewhat confusing.

Chainlink (LINK) continues to lead the market, rising 12% to reach a new record high of $19.80. Ether (ETH) appears to be losing momentum as it fell 2.2% and is struggling to recover the $340 level.

Meanwhile, EOS has finally managed to break above a key resistance to rise more than 18% and is currently trading at $3.75

According to CoinMarketCap, the overall capitalization of the cryptocurrency market is now at $373.4 billion and the Bitcoin dominance index is currently at 58.8%.