Bitcoin is not far from $12,000.
After hitting this level the past weekend only to crash soon after, the digital asset is back to flirting with the level that was last seen in August 2019.
However, despite the upward momentum, $12k might not come yet. As a matter of fact, for a sustainable rally, a bit of retracement would be good for BTC before we blast through $12,000, said analyst Mati Greenspan.
“But judging by the current temperature, I'm not even sure a cooldown period is possible,” he added.
Analyst Bemajim Blunts is of a similar opinion but says just like S&P 500; he expects BTC to continue to grind up.
It has been nearly 20 days that bitcoin has been enjoying an uptrend during which it has spiked up 29%. Trading around $11,800, the ‘real’ trading volume remains above $2 billion, reaching the yearly highs after the almost 3-month long downtrends shift upwards.
These gains have brought back the sentiments of “extreme greed” in the market at a reading of 77. However, we usually don’t stay in this area for long, and historically; it has been an indication of the market top getting close.
But last time the Crypto fear and Greed Index pushed past 80 was in June 2019 that saw the price of bitcoin surging more than 50% over the next ten days before topping out, stated Arcane Research. Additionally, this indicator wasn’t live during the massive bull run of 2017.
The macro-environment is also supportive of a move up in the form of currency debasement fueled by quantitative easing.
Traditional safe-haven assets like gold and silver have already rallied to their new all-time high highs. Over the past six months, “Bitcoin has been placed squarely in that same narrative,” said Meltem Demirors of CoinShares in an interview with Barron’s.
She noted how bitcoin options have been seeing a “lot of growth,” outpacing the spot volume, much like what’s going on in the gold, oil, and other commodity markets.
The options book had a lot of pain, and shorts were trapped that needed to cover their shortfall, so “what we saw is a cleanup in the market (that sort of coincided with this breakout of Bitcoin),” she said.
Now that bitcoin is working on printing the first weekly close above $11,500 since January 2018 after breaking the technical resistance around $10,500 recently, “this is very bullish,” said TorbjrnBullJens, CEO of Arcane Research.
“Looking at the underlying market development, it’s not unlikely that BTC can reach a new ATH above 20k USD by EOY,” he said.