Bitcoin continues to play with $12,000.
The world’s leading digital asset had another day like the last weekend when BTC breached $12k only to dump back to $10,500.
However, this time, we didn't even fall to $11,500 and are back to approaching $12,000. At the time of writing, BTC/USD was trading under $11,900, up about 3% while managing a ‘real’ trading volume of $2.45 billion.
Bitcoin has been rallying for four straight weeks ever since it broke out from its post-halving range in July.
What’s even more interesting is, bitcoin futures contracts on CME are back to trading above $12,000, yet another attempt after last week.
Bitcoin's contract on the regulated exchange went as high as $12,220 and is currently trading at a premium of 1.2%.
Today’s price movement on the exchange got the CME gap between $11,650 and $11,720 filled. “This is about to get sent. All the check marks for a really bullish market. Good luck bears,” shared one analyst about this development.
A legit macro asset bucket
According to trader Scott Melker, bitcoin is in a bullish “period,” and any dip that comes in its way is just to buy, and “any chance to grab a higher low is welcome.”
On-chain analyst Willy Woo is of similar opinion who says this bull market actually started in April 2019. At that time, BTC was trading around $5,000 that went to 2019 high of $13,900 at the end of June.
Now, what we are going through is “the early main bull phase,” he said.
According to him, the market is looking like Q4 of 2016 all over again but with different dynamics and themes at play. These themes include “the legitimisation of BTC for large institutional funds and also the easy accessibility to buy crypto for the masses with the likes of Square Cash, PayPal.”
As we reported, Square reported $875 million in bitcoin sales on total net revenue of $1.92 billion and gross profit of $597 million in Q2 2020. Bitcoin revenue for this quarter was up 600% YoY, while profit rose more than 700% YoY.
In 2020, so far, bitcoin has increased by over 62%. Much of this growth is the result of the unprecedented monetary policy by the central banks across the world. The trillion-dollar monetary stimulus by the Fed and the interest rates going negative has investors looking for an alternative asset class.
The Federal Reserve's attempts to control inflation are likely to end in a disaster, which will benefit #BTC, says Anthony Pompliano. We agree. Once the FED loses control over inflation, there's no going back. #Bitcoin
— Weiss Crypto Ratings (@WeissCrypto) August 10, 2020
Bitcoin is also starting to look more like digital gold as its one-month correlation with the yellow metal hit new highs moving in the opposite direction to bitcoin’s correlation with the S&P 500.
“I think this cycle BTC gets to prove itself as a legit macro asset bucket for traditional investors, while the cycle after this it overtakes gold to be the significant digital SoV for a digital age,” said Woo. “Expecting sovereign wealth funds to deploy this cycle and next.”