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This recent Bitcoin price upgrade recorded reveals the bulls have been able to keep the price away from its previous resistance level ($11,500) as crypto traders and investors now shift their focus on the $12,000 price level.
Yesterday we wrote about how the dollar weakens each day more and more, that even conservative investors like Warren Buffett are getting away from it. We also mentioned that Max Keiser in his latest tweet says that, therefore, Bitcoin is going to rise even more. Well, he was right. The price of Bitcoin (BTC) has hit $12,000 again, and traders are becoming more and more optimistic that the digital currency will stay at this level at least for some 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. Three factors are leading traders to become more perceiving when talking about Bitcoin in the short to medium term: The potential catalysts are the, already mentioned, decreasing U.S. dollar, the strength of the $10,000 support and Ethereum (ETH) strong jump.
Many Factors Support Bitcoin Rise
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.
“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 explain this falling dollar as a good thing for Bitcoin because other stores of value are priced by the U.S. currency. During last few months, the dollar plunged pretty hard against other reserve currencies as are euro, yen or the British pound. Be it as it may, both “safe havens” gold and Bitcoin have delivered big jumps since April this year.
The strong $10,000 support level of Bitcoin increases the chances of a bigger rally, and it’s important to mention that this is actually the longest period Bitcoin has been over $10,000 since the all-time high rally in 2017.
Eric Thies, a cryptocurrency technical analyst, noted that Bitcoin might never drop below $10,000 again.
“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?”
According to the recent price trend of Bitcoin, researchers at Cryptowatch think BTC could reach multiple new all-time highs by November.
Ethereum and Bitcoin Interaction
Another scenario for Bitcoin in the short term is a period of sideways consolidation pretty much the same as those seen in previous years.
BTC typically stays stable throughout September to early November and that situation doesn’t change since 2016. Based on that, we could say, historical matrix, there is a possibility that BTC levels between $10,000 and $14,000.
Cathy Wood, CEO of Ark Invest, said earlier:
“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 perfect for Bitcoin, as it would build up its foundation for the next rally.
An even more motivating result 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. At the time of writing Bitcoin was falling a bit by 3.94% to $11,436.
Capital Economics’ senior economist Jonas Goltermann stated:
“Perhaps more importantly, there is no obvious alternative to the dollar. The next two largest economies, the euro-zone and China, are both smaller than the US, and the euro (due to its still-fragile political underpinnings) and the renminbi (due to China’s capital controls and unique political system) have significant shortcomings as reserve currencies.”
Still, while it might be expected that the Bitcoin is jumping, we sure didn’t expect Ethereum will be breaking all its boundaries. The Ethereum price, climbed more than 10% in only 24-hours and therefore added to gains of all almost 300% so far this year. At the time of writing the price went down a bit, by 5% to $446.21.
It is important to mention that a lot of Bitcoins are “wrapped” around Ethereum with the help of Ethereum based tokens such as WBTC. In the meantime, the price of Ethereum is jumping because of the decentralized finance (DeFi) craze that’s currently sweeping the Bitcoin and crypto world. DeFi is the idea that cryptocurrency technology can be used to recreate traditional financial instruments such as loans and insurance.