Bitcoin price hit $12,000 again, leading traders to turn bullish as BTC attempts to turn the key level to support.
The price of Bitcoin (BTC) has hit $12,000 again, and traders are becoming more optimistic that the digital asset will hold the key level this time.
So
far in 2020, BTC has topped the $12,000 level four times (all since
Aug. 2), but flipping the crucial resistance level to support has been a
huge challenge.
Cryptocurrency daily market performance snapshot. Source: Coin360
Three
factors are leading traders to become more bullish on Bitcoin in the
short to medium term: The potential catalysts are the declining U.S.
dollar, the strength of the $10,000 support and Ether’s (ETH) strong upsurge.
A confluence of factors support the uptrend of Bitcoin
According
to cryptocurrency trader Scott Melker, the U.S. dollar is showing
slowing momentum, and this is shown by the dollar breaking down from a
10-year long channel and demonstrating a clear rejection. Melker said:
“Dollar
looks dead, as I have been saying for months. There was a weird
euphoria last week that it was bouncing. Now the breakdown from a decade
long channel is clear. It should bounce up to retest at some point, but
there's nothing bullish. Good for BTC.”
Many
analysts interpret a declining dollar as a positive for Bitcoin because
alternative stores of value are priced by the dollar. In recent months,
the dollar has fallen substantially against other reserve currencies.
Coincidentally, gold and Bitcoin have recorded steep rallies since
April.
The strong $10,000 support level of Bitcoin raises the
chances of a larger rally, and it’s important to note that this is the
longest period Bitcoin has been over $10,000 since the all-time high
rally in 2017.
XBT/USD 1-week chart. Source: TradingView.com
Eric Thies, a cryptocurrency technical analyst, hinted that Bitcoin might never drop below $10,000 again. He said:
“We
may never see #bitcoin below $10,000 USD again. Alts will moon too. Did
you get the most you could, while you could?... Or did you let the
negativity + skepticism of the crypto bear market block you from an
incredible investment?”
Based on the recent price
trend of Bitcoin, analysts at Cryptowatch expect BTC to achieve multiple
new all-time highs by November. The researchers said:
“Bitcoin
tracking well against PlanB's Stock to Flow (S2F) model. Assuming 10%
lost coins, BTC forecasts include new all-time highs by mid-November and
~27K by the end of the year.”
An alternative scenario
Another scenario for Bitcoin in the short term is a period of sideways consolidation similar to those seen in previous years.
BTC
typically remains stagnant throughout September to early November and
has done so since 2016. Based on that historical pattern, there is a
possibility that BTC ranges between $10,000 and $14,000.
Cathy Wood, CEO of Ark Invest, previously said:
“We
could stay in a new trading range, just at a little bit of a higher
level than the recent 6 to 10. Maybe we’re in the $10,000 to $13,000
range. Nonetheless, a breakout.”
A consolidation
phase above the $10,000 support would be ideal for Bitcoin, as it would
strengthen its basis for the next rally.
An even more encouraging
outcome would involve BTC flipping the $12,000–$12,400 range to
support then consolidating above $12,000, as this would prepare the
digital asset for a strong move to $13,000 to $14,000.
source link : https://cointelegraph.com/news/bitcoin-price-hits-12k-again3-reasons-traders-are-mid-term-bullish
