Bitcoin (BTC) is at $ 12,000 left, and traders are increasingly hoping that the digital asset will maintain a key level this time around.
So far in 2020, BTC has crossed the $ 12,000 level four times (since August 2), but changing the critical level of resistance to support has been a major challenge.
There are three factors that make traders more optimistic about Bitcoin in the short to medium term: the decline in the US dollar, the strength of the $ 10,000 support and the strong growth in Ether (ETH) are potential catalysts.
A combination of factors supports the upward trend with Bitcoin
According to cryptocurrency trader Scott Melker, the US dollar is showing a slowdown, as the dollar’s exit from the 10-year channel and the apparent rejection show. Melker said:
“The dollar looks dead, as I have been saying for months. Last week there was a strange euphoria about this bounce. Now the gap in the 10-year channel is clear. You should jump at some point to test again, but nothing bullish. Good for BTC. ”
Many analysts interpret the decline of the dollar as positive for Bitcoin because the alternative store with value is priced in dollars. In recent months, the dollar has fallen significantly against other reserve currencies. Coincidentally, both gold and Bitcoin have risen since April.
Bitcoin’s strong support level of $ 10,000 increases the chances of a further rally, and it is important to note that this is the longest period Bitcoin has crossed $ 10,000 since the record in 2017.
Eric Tees, technical analyst for cryptocurrency, suggested that Bitcoin may never fall below $ 10,000 again. He said:
“We may never see a #bitcoin under $ 10,000 again. Everything wants the moon too. Did you get the most out of it while you could? … or did you let negativity + suspicion in a bearish cryptocurrency market stop you from making incredible investments? ”
Based on the recent trend in Bitcoin prices, Cryptowatch analysts expect BTC to reach several new highs sometime by November. The researchers said:
Bitcoin tracks well compared to the PlanB Stock to Flow (S2F) model. Assuming a 10% loss on coins, the forecast for BTC includes full-time highs by mid-November and 27,000 by the end of the year. ”
An alternative scenario
Another scenario for Bitcoin in the short term is a period of sideways consolidation similar to previous years.
Typically, BTC remains the same from September to early November, and this has been the case since 2016. Based on this historical pattern, there is a possibility that BTC will range from $ 10,000 to $ 14,000.
Ark Invest CEO Katie Wood previously said:
“We can stay in the new trading area, only at a slightly higher level than the last 6-10. We can be in the range of $ 10,000 to $ 13,000. However, a breakthrough.”
A consolidation phase over the $ 10,000 support will be ideal for Bitcoin, as it will cement the foundation for the next rally.
The most encouraging result is that BTC fluctuates in the range of $ 12,000-12,400 in support and then rally over $ 12,000, as this digital asset promises to make a strong move to $ 13,000-14,000.