Bitcoin is having a good year despite the coronavirus panics and the nervousness of the markets.
After reaching an annual high of about $13863 on Oct. 28, the world’s largest cryptocurrency by market capitalization underwent a sharp correction of almost $1000 before rebounding and stabilizing at $13281.
From that point on, it began a stable recovery process, with small daily growths, closing on Friday near $13680.
Today October 31st, Bitcoin managed to break that record, reaching $14,100 (Bitstamp) at the time of writing. This represents a 5% growth in the last 24 hours.
Bitcoin’s Ascend to New Highs
Bitcoin has been on a bullish streak since March, when the crash in the financial markets erased all the gains it had made throughout the year, taking the token to the lowest level since April 2019.
For those swing and position traders, things are looking pretty rosy. The cryptocurrency has respected the bullish channel that was formed since March. If the trend continues, the most robust support in the channel could be near $11,500 with significant resistance above $14,500, a level not experienced since early 2018, when the BTC bearish run began after the 2017 bubble burst.
From a technical standpoint, Bitcoin is in an overbought zone. The RSI is above 70 points, so caution is advised in the face of a possible later sell-off. Market sentiment and announcements from large financial institutions are currently serving as support to continue pushing up prices.
For example, MicroStrategy recently raised its investment in Bitcoin to $450 million. Square bought $50 million in Bitcoin, and PayPal added support for purchasing cryptocurrency. This has undoubtedly helped boost investors’ confidence who are tired of almost 2 years of struggling.
The MACD doesn’t give a clear signal to traders. Still, it does point to a continuation of the uptrend in the short term – although the closeness between the “short” and “long” lines shows that a normal correction can occur at any time.
Respecting Short-Term Boundaries
In the short term, Bitcoin has respected the Fibonacci retracements: The corrections have not broken below the $12,900 support, and both the RSI and MACD point to a possible price correction after the recovery.
The proximity of the U.S. presidential election could also play a key role in Bitcoin’s behavior in the coming weeks. There is a general belief that an eventual victory for Trump could lift investors’ optimism. At the same time, Biden could cause nervousness and a possible fall in the stock markets.
Bitcoin could follow these trends, although there are reports that, in general terms, the crypto is decoupling itself from any other traditional financial market. However, an eventual change of president in the United States is an event big enough to consider before making any investment.
If things stay within ordinary, Bitcoin could touch its ATH halfway through next year. Never before has Bitcoin’s price been above $10,000 for so long, and this is a sign of strength.
The bullish run of the past few months could also be considered the most apparent upward trend since the 2017 bubble. In fact, this movement looks more natural and mature than the one of 3 years ago.
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Cryptocurrency charts by TradingView.