[ad_1]
Bitcoin eyes a sharp rebound as it trades near a confluence of technical supports made stronger by external fundamental factors.
That Bull Setup
The flagship cryptocurrency is carving out what appears to be an Ascending Channel formation, attested by more than two confirmation of its upper and lower trendlines acting as resistance and support, respectively. As of this Friday, BTC/USD is testing the support trendline for a potential retracement move.
Bitcoin price trades upward in an Ascending Channel formation. Source: BTCUSD on TradingView.com
A baseline of another channel formation — a Descending one — is also converging with the Ascending Channel’s support trendline. That doubles up the area’s strength while protecting Bitcoin from further bearish assaults. Tripling up the power is a visible divergence between the cryptocurrency’s rising volume and declining price. It is—technically—bullish.
Nevertheless, Bitcoin risks an extended downside correction below the supposed price floor should more traders decide to secure their profits. Many analysts agree that the cryptocurrency could fall towards the mid-$16,000s but add it would undergo a major retracement towards its previous high, near $20,000.
The Ascending Channel formation suggests the same. Previously, each of Bitcoin’s attempt to close below its support trendline has met with strong buying pressure from bulls. As a result, the price pares its losses and rebounds to as far as the Channel’s upper trendline.
Considering a fractal-repeat, BTC/USD may undergo a reversal on the current support trending retest, towards the Channel resistance. That points to another all-time high formation around $21,000.
Bitcoin Fundamentals
Massachusetts Mutual Life Insurance Co, a 156-year-old financial firm, announced Thursday that it bought $100 million worth of Bitcoin units for its general investment account.
The investment looks tiny if compared to what MassMutual already manages (nearly $235 billion worth of assets), but it signifies Bitcoin’s further growth. The cryptocurrency’s price peaked in late November at approx $20,000 after a flurry of mainstream firms, including MicroStrategy, Square, invested in it as a measure against inflation.
Tyler Winklevoss, who runs a cryptocurrency exchange, Gemini, in the US alongside his twin Cameron Winklevoss, said the latest investment from MassMutual ensures that Bitcoin would hit the valuation of $500,000 per unit in the future.
“The type of investors in this bull run is very different,” he told CNBC’s “Squawk Box Asia” during Singapore’s FinTech Festival. “They’re super sophisticated institutional investors like legendary Paul Tudor Jones, [Stanley] Druckenmiller.”
Bitcoin currently trades about 11 percent below its record peak, a sign of bearish correction that typically follows parabolic upside moves. On a year-to-date timeframe, the cryptocurrency is still up by approx 150 percent.
[ad_2]
Source link