The price of Bitcoin (BTC) hits a new high in 2020 today, and has risen by 25% since the beginning of this year, without a doubt a huge start. Not only has Bitcoin boomed in the past few weeks, even competing currencies have been following, and even higher. With less than a week to go before the Spring Festival of 2020, is Bitcoin continuing to rise or is it temporarily closing at the top?
Bitcoin breaks 7-month downtrend
A few weeks ago, the price of Bitcoin broke the downtrend, marking the end of downward pressure. A slight test of $ 7,600 confirmed this breakthrough, after which the price continued to rise above today's $ 9,000.
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The price of Bitcoin broke through $ 8,200 and rose to $ 9,000. This level currently provides an obstacle and the next resistance.
Total market cap also breaks downtrend
The total market value has also broken the downward trend, currently hovering around 248 billion US dollars.
As the recent article shows, the next resistance for total market cap is between $ 247 and $ 248 billion. The $ 195 billion green zone became support, after which prices continued to rise. A similar situation occurred at $ 207 billion, leading to a breakthrough in the downtrend.
The next resistance level is shown at $ 2247-24.8 billion (our current price level), which is the level supported in the summer of 2019. This level should usually be those traders who expect short or sell positions. Breaking through this level will set the next targets at $ 2680 and $ 350 billion.
Competitive currency market value looks the same as February 2019
The competitive coin market has performed well recently, especially BSV and BCH, and many privacy coins have shown a bullish bull market in the past 2 weeks. The market value of the competing currency shows similarities with February 2019. During this period, the total market value of competing coins hovered under the support of 48 billion U.S. dollars, after which the breakout caused a surge of 190% in a few months.
A similar structure is shown in recent charts. The total market value was supported by US $ 52 billion, and the subsequent ups and downs of US $ 58 billion triggered the next resistance. The next resistance is the price level of 80 billion U.S. dollars, and the current market value of competing currencies is hovering.
If the market value of the competitive currency breaks through this area, the next target will be found at 92 billion dollars and 130 billion dollars, which means that this market value is the same as the level of summer 2019.
Bitcoin dominance is on the verge of collapse
Bitcoin's dominance chart shows signs of a potential collapse. If Bitcoin's dominance drops below 67%, it is likely to continue to drop to 60%. Such a decline will cause competing currencies to outperform Bitcoin.
The top of the Bitcoin dominance chart shows a bearish divergence, which usually means a trend reversal. Similar signs were shown at the top of September 2018.
Bitcoin's current momentum is up, so a bullish scenario is likely. Based on recent price movements, a stabilization of $ 8,800 is essential for continued upward movement.
If US $ 8,800 is stabilized as support, it is likely to break through the US $ 9,000 resistance level (By the time of writing, Bitcoin had exceeded US $ 9,000, currently around US $ 9,100). The next resistance levels are $ 9,400 and $ 10,000.
Overall, Bitcoin has rebounded since $ 6,400, so the upward continuation will stop consolidating at some point. This is the main goal I expect Bitcoin to achieve in the coming weeks. If Bitcoin breaks out again, it is likely that it will start to fluctuate between $ 9,000 and $ 10,000 for some time in preparation for the next rise.
Where do we build this range? It is uncertain at this time because we have not fully confirmed any short-term trend reversals and prices are still rising. If the price of bitcoin exceeds $ 10,000, then FOMO (fear of missing) will re-enter the market, triggering the price to rise to $ 11,600.
External factors favor bitcoin in the short term, stimulating the market to rise
The reason for Bitcoin's rising trend after the start of the year 2020 is not only internal factors (halving emotions, etc.), but also related to many external factors, such as competition between the United States and Iran to stimulate global risk aversion. In addition, institutional investment continues to increase buying, which is also regarded as a market optimistic mood.
Grayscale, the world's largest Bitcoin management fund, recently released its 2019 annual report. The report shows that Grayscale bought an average of $ 14.9 million in bitcoin trust products every week in the last quarter of 2019.
The Chicago Mercantile Exchange (CME) just officially launched bitcoin options products last week, and quickly beat its rival Bakkt's trading volume after going online. According to a report by an analyst at JPMorgan Chase, the largest bank in the United States, the listing of bitcoin options products by CME Group will bring bitcoin “peak of interest” tomorrow. There has been a surge before launch.
With so many positive factors gathered in the near future, the bullish sentiment in the market has increased, pushing Bitcoin to the next higher resistance level.