The bitcoin price, on Aug 17, soared above $12,000 to new 2020 highs coinciding with similar gains posted by the US equities following a depressing Q2 pinned to the slowing effects of COVID-19.
Bitcoin Prices Rally at The Back of Supportive Technical Indicators
A Bloomberg report shows that at yesterday’s peak, the Bitcoin price rose to $12,473 during the New York session as other coins like Litecoin and Bitcoin Cash posted impressive results.
Consequently, the Bloomberg Galaxy Crypto Index spiked to its highest level since June 2019. At the time of writing, the BTC price had retracted. It is now changing hands at around $12,240, up three percent in the last trading week according to data streams from Coinlore.
Interestingly, this comes roughly three months after the Bitcoin network halved its miner rewards through a hard-coded event automatically activating every after 240,000 successful blocks.
Usually — and if historic price action guides, bitcoin prices tend to peak 18 months after the event as gleaned from past price performances.
The Bitcoin price is now up 44 percent after the halving event ushering in the third epoch.
Despite yesterday’s spike, traders remain optimistic. Based on their technical assessments, they expect BTC prices to “moon” in the coming months now that it is trading above $12,000, a strong technical liquidation level, and a round number.
The momentum to the upside is also positive. From the weekly chart, BTC candlesticks are banding along the upper BB pointing to high participation.
This is sparked by several fundamental factors.
Inflation Fears and Worsening Relationships between the U.S. and China
Amid central banks easing to stimulate the economy through inflation catalysts like near-zero interest rates and infinite quantitative easing programs, Bitcoin and other safe-haven assets like gold and select fiat currencies tend to be the major beneficiaries.
Talking to Bloomberg, Seamus Donoghue, the vice president of sales and business development at METACO said:
“Inflation is currently low but real yields are across the board negative — negative real yields and the monetary stimulus/spending has driven investors to seek out inflation hedges such as gold. Given its limited supply and growing institutional acceptance, Bitcoin will also likely benefit from the market seeking inflation hedges.”
The situation is further exacerbated by worsening relations between the two leading world superpowers with some forecasting a possibility of a paradigm shift that will drastically clip the greenback’s power.
Already, China and Russia, have allied with the sole objective of reducing their reliance on the USD. This is a net negative for the world’s leading reserve currency, and overly bullish for Bitcoin.
BTCManager also reports that partly thanks to its stellar performance, Bitcoin is the second most viewed asset after Tesla in the U.S.