The new maximum for Bitcoin price in 2020 is $ 13,184. BTC rate has already risen above the $ 13,000 twice. The next goal is to fix above this level. If it succeeds, Bitcoin will have two resistance levels further: by $ 14,000 and then immediately by $ 20,000. Thus, Bitcoin could begin a cycle of explosive growth, and this year it may renew its historical maximum price.
In this article, we will analyze which news about investing and accepting Bitcoin, including from PayPal, the BTC pump occurred.
First, let’s discuss how Bitcoin made its new high in 2020. Growth began on October 17 and today at the high point is + 17%:
The chart is drawing a red candlestick now, which is a natural pullback after such a powerful upward movement.
Note that two superbull news helped the cryptocurrency market. Firstly, a new trend has emerged on the market, when whole companies are investing in bitcoin. The first was MicroStrategy, which entered this market for as much as $ 425 million. Then Square added its $ 50 million to the general cauldron. The next investments were from Mode Global Holdings, which is traded on the London Stock Exchange and intends to invest in the first 10 cryptocurrency % of the company’s funds.
It looks like one big wow effect. But in practice, 10% of the company’s funds with a market cap of $ 37 million and the beginning of trading on the stock exchange only in October is such a bonus:
We can say that someone decided to hyip on crypto trying to pump the price of their shares in this way.
But there was also the second, for many the main news was the integration of the PayPal payment network of Bitcoin. Rumors about this appeared a few months ago, and now everything is official. PayPal users will be able to buy, store and sell Bitcoin, Ethereum, Bitcoin Cash, and Litecoin in the United States and then in other countries soon. By the way, Litecoin was the most fortunate from this story, which grew by 12%.
And already in 2021, the ability to pay with cryptocurrency for goods through PayPal will be added, but with one condition. The funds will be immediately converted into US dollars or other fiat currencies. That is, you will pay with crypto, but it will remain on the service and will not go anywhere, while the seller will receive fiat.
And in fact, all this news boils down to the fact that PayPal launched its own crypto wallet with the function of buying Bitcoin for US dollars, and also made something like a virtual crypto card with the ability to cash out your bitcoins and buy some goods for them.
This is generally very cool, but far from the same mass adoption around the world as it might seem at first glance.
Bitcoin continues to trade above the 3-year global resistance line:
As we can see, BTC price went for a correction to the trend line, got support from it, and then serge again.
Also, you should definitely mention the 21-week moving average:
Now the price has also pushed off from this line, which is extremely important and signals a bullish or bearish market. We marked similar touches on the chart in 2016 and 2017, and depending on which phase of the Bitcoin market cycle we are in, we can imagine how strong and rapid further growth will be.
And also after how much time will Bitcoin reach new ATH:
In addition, many cryptocurrency proponents point out that there is virtually no resistance between $ 13,000 and $ 20,000. Therefore, in theory, we can fly through this segment at one incredible acceleration and set a new historical maximum for the Bitcoin price. Up to the point that it will happen before the end of this year.
We would really love to see it. But here they simply have to remember that in the summer of 2019, many also believed in the native and gave reasons why it should come in the next six months or a year. And then there was one big disappointment that now fits into the current chart analysis.
And the trick is that with the help of technical analysis it is extremely convenient to look into the past and show where which figures worked. But there are problems with the future, and regardless of the picture on the chart, it can always be done in its own way, after which, of course, a suitable explanation will be found for it.
Therefore, we propose to face the facts and not build illusions about the native until, firstly, bitcoin exceeds the maximum of last year, this is $ 14,000. After that, we also should not relax until the $ 20,000 mark is taken. A stable bull market always began from exceeding the previous maximum, and therefore it is precisely by it that you should be guided.
We support Bitcoin growth, and we ourselves have been waiting for a rocket for an extremely long time, but let’s not rush ahead of time.
Recently, the purchase of the Grayscale Investments crypto fund has been a really powerful signal for injecting capital into the cryptocurrency.
The company attracted more than $ 1 billion in 3Q 2020. But these are institutionalists, they will not go into the asset on highs. Grayscale buys cryptocurrency on OTC platforms itself. Therefore, it does not affect trading volumes and does not push the rate up.
But the volumes that we see on the crypto exchanges are, firstly, not so large as to show the realism of the current growth with further potential. Secondly, we know perfectly well how the exchanges draw these trades and that there is at best 10% real. And we draw such conclusions on the basis that for growth there must be activity in the market and it should not be limited only to exchanges. And as the same Google Trends show, there is no demand for Bitcoin now.
That is, the main mechanism of each growth of the cryptocurrency market, called FOMO, has not yet turned on and the question of where the money for the current pump and its continuation comes from remains open.
And another important risk that must not be forgotten is the current economic situation. I really want to believe in the statements of those who are convinced of the growth in demand for bitcoin due to the accelerated inflation of the dollar, but the truth is that this inflation is not yet close. And it will not exist until the economy is restarted, and this process, as the experience of Japan shows, can drag on for twenty years or more.
The demand for cryptocurrencies is growing sharply when the country has not just inflation, but a collapse.
But if we just sit at zero rates with near-zero inflation for the US dollar, then no collapse will happen, and no one will run into Bitcoin. So we are not against those who expect that the fiat economy will collapse tomorrow and everyone will switch to cryptocurrency. But let’s just say, we recommend that you be patient, because this process is unlikely to be quick.
Today, the best scenario for Bitcoin is not a continuation of the crisis, but a way out of the stalemate in the economic recession. Because, firstly, this way we will avoid a collapse following the stock market. Second, people will have the money to continue driving Bitcoin’s growth, and we can continue to push the price up.
In addition, the showdown of regulators with BitMEX in the US and OKEx in China is gaining momentum. Oddly enough, this is also a good signal for the market. Because if the exchanges are stepped on the tail, they will beware of manipulation, and the chances that some group of whales will decide to make money on the bitcoin dump will be much lower.
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