- Summary:
- Bitcoin price has held steady today as traders react to the strong volume. The bullish pennant hints at more upside in the near term
Bitcoin price is still in consolidation mode as traders assess the impact of a Joe Biden presidency and the Covid-19 vaccine. The currency is trading at $15,408, which is slightly below this week’s high of $15,948.
The biggest question about Bitcoin enthusiasts is what the incoming Joe Biden presidency mean for Bitcoin and other digital currencies. It’s a relatively difficult question to answer because the president-elect has not stated his opinion on Bitcoin. This is contrast to Donald Trump, who tweeted that he was not a fan of the digital currency.
However, we know that Biden was supported by Elizabeth Warren, a leading proponent for tough regulations. Therefore, while Donald Trump was not a fan of the currency, Bitcoin did well during his tenure because regulators were relatively friendly. Indeed, this year, his comptroller of currency said that banks could hold digital assets for their customers.
Tough regulations in the US could have significant impact at a time when the volume of Bitcoin transactions is rising. According to Arcane Research, trading volume has increased by 273% to $3 billion this week.
The same is true for Bitcoin futures that trade in the CME. Most importantly, several mainstream companies have moved into the Bitcoin train, with firms like MicroStrategy and Square accumulating coins worth millions.
Still, only a major policy change will have a negative impact, which is not possible. This could include banning the currency in the US or increasing KYC and AML policies. At the same time, Biden team has some people who seem to be Bitcoin-friendly, including Kamala Harris and Andrew Yang.
Bitcoin price technical analysis
On the daily chart, we see that Bitcoin price has been in a strong uptrend in the past few months. This has seen the price move above all the short and medium-term moving averages. As I wrote yesterday, Bitcoin is forming a consolidation pattern that looks like a bullish pennant pattern.
Therefore, while the consolidation is likely to go on today, I suspect that the price will soon breakout higher. If it does, the next resistance could be at $18,000. On the flip side, a move below the 50-day EMA at $13,000 will invalidate this trend.
Bitcoin technical chart
