Bitcoin - BTCUSD
Bitcoin price is in a tight range today as traders reflect on the tremendous rally in the past few days. The currency is up by almost 400% from its March low of $3,905, becoming one of the best-performing assets in the world. Indeed, gold has added just 25% from its this year’s low.
Today, Bitcoin is trading at $19,120, which is a few points below yesterday’s high of $19,480. This rally has happened mostly because of three reasons. First, demand for the currency by institutions has grown rapidly in the past few months. For example, companies like MicroStrategy, Square, and PayPal have acquired BTC worth millions of dollars.
Second, Bitcoin price has also rallied because of low interest rates in the United States and in other developed countries. In response to the pandemic, major central banks have brought rates to almost zero and announced stimulus packages worth trillions of dollars. This funding has led to currency debasement and high demand for assets like stocks and Bitcoin.
Third, high demand for Bitcoin has helped fuel the rally. In recent months, most BTC exchanges have reported a surge in volume as large investors shift to the currency because of its store of value qualities. Similarly, in the most recent quarter, Square announced that it made more than $1 billion in Bitcoin revenue.
And, respected analysts are optimistic about Bitcoin price. On Monday, I wrote about Cathie Wood, the Tesla bull who predicted that the currency would rise to $500,000. And yesterday, Dan Tapiero, the founder of Gold Bullion International said:
“In the next five years, I can see gold at $4,000, so that’s double. But if gold is at $4,000, Bitcoin is probably somewhere between $300,000 and $500,000, so that’s a 20, 30x.”
On the daily chart, we see that Bitcoin price has been on a strong upward rally. It reached a three-year high of $19,480 yesterday on its path to $20,000. The currency remains above the 25-day and 50-day moving averages.
The price is above the 25-day and 50-day exponential moving averages while the Relative Strength Index (RSI) is above the overbought level of 70.
Therefore, while a pullback is possible, there is a possibility that BTC will continue rallying in the near term. However, a move below $16,000 will mean that there are more sellers in the market.
