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How Long Will Bitcoin Hold Bullish Positions?
How Long Will Bitcoin Hold Bullish Positions?
The largest cryptocurrency surged to $ 11,755 this Wednesday and is approaching the 12,000 mark, a level that Bitcoin has not traded steadily in over a year. Bitcoin consolidated above $ 11,400 this Wednesday at the UTC close. Despite the small disruptions on Monday and Tuesday, which resulted in the price almost falling to $ 10,000, the bulls still managed to keep the growth above this level.
It seems the Bitcoin mania is almost back at its 2017 peak.
The crisis is stimulating the digital market
Economic losses from the COVID-19 are increasing. In the USA $ 600 a week benefit for laid-off workers expired last week, threatening economic recovery. The Associated Press predicts that the US government's budget deficit this year will rise to $ 3.7 trillion, breaking the previous record of $ 1.4 trillion in 2009. Governments are introducing additional stimulus measures to get out of the worst recession since the 1930s. The coronavirus crisis has pushed people to look for new tools to keep their money. Many investors see bitcoin and digital assets as a new inflation hedge. Moreover, American banks are now allowed to hold bitcoins, which is pushing market participants to turn to cryptoassets more actively.
Coin Metrics, an analyst firm, noted that Bitcoin averaged over 1 million active addresses per day over the past week. For the first time since January 2018. And Arcane Research noted in its latest report that bitcoin trading volume exceeded $ 2 billion in a few days.
American Congressman Tom Emmer believes that bitcoin will remain forever and in times of crisis, its popularity will increase especially. He stated this during the “Pomp Podcast” program.
“When we get out of the crisis, bitcoin will not go anywhere. It will only get stronger. You will see. It has value, and when something is appreciated, people take risks and the asset continues to grow”.
Altcoin's success depends on Bitcoin's growth?
Large-cap altcoins such as EOS, Tezos, XRP and Stellar and some DeFi tokens like LINK, Maker, Compound Coin and Aave also saw gains this week.
On August 5, a trader il Capo said that Bitcoin must hold $ 10,500 for altcoins to remain optimistic. Since it is this level that is an indicator that the market is in a bull phase.
Bitcoin dominance remains high, but expectations for altcoins are largely tied to the latest achievements of Ethereum this year. And investors can’t ignore the potential of DeFi, forecasts look optimistic for the industry: many projects have shown progress and promising results, as well as real products. This development trend was independent of the price of Bitcoin, even in the previous two months of price stagnation, when BTC behaved almost like a stablecoin, hovering in the $ 9,000 to $ 10,000 range.
How long will Bitcoin be strong?
Bitcoin made its biggest move this year when it broke the $ 10,500 resistance level.
Swissquote's head of digital assets, Chris Thomas, expects bitcoin to hit the $ 12,000 mark by Friday. And all the signs point to that. The next goal that needs to be overcome is the level of about $ 14,000. This is the maximum that BTC reached in the summer of 2019. PlanB analyst believes that this is the level that will help change the opinion of skeptics about the prospects for investing in digital assets.
Many members of the crypto community believe that at the moment BTC is only at the beginning of a prolonged growth, the starting point of which was the halving of 2020. According to Ecoinometrics analysts, already on December 31 of this year, we should expect a bitcoin price of $ 41,000. And a year later, the asset rate can reach $ 387,000.
If this statement seems impracticable to you, then we recall that in May of this year, analysts of the Kraken exchange predicted the same amount, but by 2044.
No one can say for sure how long the positive movement will last. The rally to recent highs of $ 12,000 will weaken only if prices fall below the previous support of $ 11,400.
Anyway, now the market is more prepared for a bull run than in 2017, and there are all conditions and economic reasons for the continued growth of bitcoin. We just have to be patient. And expect a breakout of the level of $ 12,000, $ 14,000 and some price surprise by the end of the year, which we have seen in the opinions of analysts since spring.
Disclaimer: We are not financial advisers, make your own decisions before making any kind of investments. We are only providing information based on the news.