Bitcoin seems to be rewarding it’s long term hodlers with just two weeks left before the end of 2020.
Just a few hours ago, Bitcoin set a new ATH, crossing into the $22,000 mark. Bitcoin continues its price discovery and we are all interested to see what happens next.
After breaking the 20k and 21k mark, the bulls didn’t want to know about support and pressed for new horizons. In just 5 hours, they managed to climb to $22,000. This brings the total market cap of Bitcoin from $360 billion to about $409 billion in one day.
This would be the largest market cap in Bitcoin’s history, and it marked the moment when ALL the BTC hodlers in the world could say they had made a profit.
At the time of writing, the price of BTC is $22117 per token.
Factors Behind The Bullrun
Many factors can explain the reason behind this massive bull run. One of them could be the Bitcoin halving that happened this year.
Besides the token shortage caused by institutions’ appetite, Bitcoin’s own algorithm lowered the supply by 50%, and the markets could be feeling the effects. The Stock-to-flow model looks pretty accurate in this regard, although its prediction of $30,000 by the end of the year might be a bit too optimistic.
One more reason could be the recent wave of big financial institutions buying Bitcoin or products associated with Bitcoin investments.
Square started the bull run when it announced a $50 million investment in Bitcoin. Then, PayPal stepped on the gas when it announced support for buying and selling cryptocurrencies
The biggest of it all will be MicroStrategy. The CEO, Michael Saylor currently owns about half a billion dollars in Bitcoin with intentions of doubling his own stash.
Bitcoin is Looking Good on the Charts, But Caution is Advised
Right now, from a technical point of view, Bitcoin is in uncharted territory. However, some indicators look optimistic. The MACD on 4 and 24-hour candles shows a cross that could indicate a change towards an upward trend in the coming days.
The RSI is high, so caution is advised; however, it is not yet at the extreme levels shown on previous occasions. This could still give room for a price increase before the bulls want to take a break.
For long term hodlers, the first strong support in case of a possible correction is near $17950 according to the Fibonacci retracements and $19700 according to the bullish channel support line that has been respected since October. This same channel puts Bitcoin between $21,000 and $25,000 by the end of the year.