Bitcoin (BTC) performance has been superb in the last trading week. The world’s most valuable digital asset is setting standards and literally anchoring the cryptocurrency market given its role.
In the last trading day, the coin is up 3%, pushing weekly gains to over 8%.
Because of this, BTC is up $1,200 in three days. Analysts now expect more if bulls reap past $9,400-500, the immediate resistance zone, in a move that will further feed the rally and improve investor confidence not only in BTC but in altcoins.
Bitcoin Bulls Reverse from a Key Fibonacci Reaction Point
9.2-9.4k is the new area of interest. A break of that and we'll likely have another week of ripping upwards.
— Flood [BitMEX] (@ThinkingUSD) January 14, 2020
At the time of going to press, BTC was changing hands at $9,300 and prices are steady following yesterday’s acceleration.
Notably, bulls are confident and the bounce from the 20-day Moving Average ensured that losses of the third week of January, the correction, have been reversed comprehensively. Prices also reversed from the 38.2% Fibonacci retracement level of the January 2020 trade range.
The reversal from this level hints of strong upward momentum and odds are, prices could easily soar into the $11,500–$12,000 zone.
Those are the tops of President Xi Jinping triggered pump of late October 2019 when the President asserted China’s ambition of being a world’s leader in blockchain and emerging technologies including AI.
Halving, Cautious Stock Market Investors Fanning BTC Momentum
The confidence in the market that’s reflected by a near parabolic rally can be attributed to upcoming events.
One of them is the halving scheduled for May 2020. Then there will be an emission shock, and block rewards will be reduced to 6.25 BTCs.
It's been almost 4 years since the last bitcoin halving and you're telling me this isn't a major event?
The incoming circulating supply will literally be cut in half on one of the most valuable assets in the world.
This shit is about to be wild.
— Tytan Inc. (@Tytaninc) January 23, 2020
Analysts say this hasn’t been factored in and could explain the rise of BTC as market forces naturally search equilibrium.
Other explanations include the risk-averse nature of the global investors as central banks continue to ease.
Stock market investors are also not confident of the rally as revealed by the number of Puts to Calls ratio which is over 1.
New sentiment indicator 🔥
Bitcoin Options Open Interest Put-Call Ratio
Ratio > 1 means more puts than calls open
For bitcoin it is structurally < 1 & correlated with the market pic.twitter.com/jx5CYVK6kV
— skew (@skewdotcom) January 28, 2020
This means there are more sellers than buyers a fact that could fan sellers and a probably crumble. In that case, BTC and other safe havens stand to benefit from capital flight.
Disclaimer The views, opinions, positions or strategies expressed by the authors and those providing comments are theirs alone, and do not necessarily reflect the views, opinions, positions or strategies of CoinGape. Do your market research before investing in cryptocurrencies. The author or publication does not hold any responsibility for your personal financial loss.
Dalmas is a very active cryptocurrency content creator and highly regarded technical analyst. He’s passionate about blockchain technology and the futuristic potential of cryptocurrencies and enjoys the opportunity to help educate bitcoin enthusiasts through his writing insights and coin price chart analysis. Follow him at @dalmas_ngetich