Bitcoin has successfully surpassed all expectations in the last 24 hours to surge past $12,000 after this price level was briefly achieved last week before falling back under $11,900 again, and this time, prices have stayed above $12,000 for the past eight hours. Bitcoin saw $12,350, an all-time-high for 2020 reminiscent of the growth trajectory the market saw in 2019 before the year’s high of $13,000 was achieved. The bellwether cryptocurrency is currently trading at $12,720 at the time of writing.
What is the main catalyst behind Bitcoin’s most recent surge? Experts have attributed it to millions worth of shorts liquidation in the past 24 hours and are of the opinion that Bitcoin will not remain above $12,000 for long. The $12,000 mark is seen as a significant psychological resistance that can only be sustained with immense buying action over a prolonged period of time.
However, on one hand, increased institutional interest in Bitcoin with every passing day is slowly but steadily driving prices upwards. Even Wall Street veterans are crossing over to the dark side, so to speak, with billionaire hedge fund investor Paul Tudor Jones announcing his faith in Bitcoin as the US Federal Reserve prints even more money. Retail investors are also seeking out Bitcoin as a hedge against inflation as a result of monetary stimulus packages in the US.
“Macro factors which thus far had a tangential link with Bitcoin, have now forged stronger bonds and seen Bitcoin climb by over 200% since its low in March, but still 40% shy off its all-time high of almost US$20,000 reached in December 2017. Technical factors are supporting the current rally as well, with signs that Bitcoin has not been overbought suggesting that gains may be sustainable,” shared Novum Alpha CEO Patrick Tan.
Other advocates for Bitcoin and cryptocurrency such as ex-hedge fund manager Michael Novogratz are anticipating Bitcoin’s rise to $20,000 by the end of the year. Former Prudential CEO George Ball also voiced his support for the world’s most capitalized cryptocurrency recently in an interview with Reuters. If Bitcoin remains above $12,000 for the rest of the week, the market can look towards Bitcoin’s next resistance level.
“Bitcoin’s next level of resistance is likely to be at US$13,800, which will need to be cleared convincingly before a stronger move upwards,” Tan highlighted.
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