After threatening to trade a little parallel under the $12,000 mark, Bitcoin has managed to break through to a new floor and is sitting comfortably above $12,000. This, of course, bodes well for the Bitcoin rally that has been going a few weeks now, and started at the lower reach of $9,000.
Bitcoin was stuck in a near two month rut when it traded in the range bound lower $9,000s. This event led to a thought that an altcoin season could be brewing — and that is not off the cards. But Bitcoin has sparked back into life and caused the excitement to return as many investors eye $20,000 and even beyond.
Having now broken into $12,000, the question is what level will make this rally really take off and perhaps even go parabolic. This conversation is being had for two main reasons. Firstly, in 2017, Bitcoin rose by $1,000 in a matter of a few days on its way to $20,000. Secondly, Bitcoin has managed to return to above $12,000 a few times since it’s all time high, but it has not had much success above $13,000 — making that level seemingly a key one.
Time for take off
2017, and the rally that took Bitcoin to it’s all time high, was of course a very different situation to the one that is currently brewing. The Bitcoin space, and the blockchain global ecosystem, is much more mature and steady. But that does not mean that a wave of speculation could not take over.
There is still plenty of evidence that investors are in Bitcoin and related cryptocurrencies for money and greed. This is best highlighted in DeFi with yield farming. Investors still ripple with excitement when there are positive moves in Bitcoin, and if there is a rally this time, it could be much larger.
Even with the welcoming of institutional investment and the big money that comes from Wall Street into the ecosystem, as well as derivatives trading, a speculative wave can still strike. It may be far more mature, and grounded, but the excitement will still be big.
More than that, the money that can be sunk into a rally that goes parabolic could knock Bitcoin over $20,000 in no time and see it keep rising to new, never-before seen levels.
It was the $13,000 mark that really made Bitcoin rise in price by about $10,000 in less than a month. The coin worked its way to there and then rocketed by $1,000s of dollars a day until the new all time high.
Bitcoin has climbed to above $12,000 a few times since then, but it has not held a foothold in the $13,000 – $14,000 level to make much of an impact. If this was to be seen, this new territory is also what could help the coin push to it’s all time high and further on.
derivatives trader JSterz highlighted “extreme” Bitcoin futures spreads as a sign that an intensely strong bullish advance may soon arrive.
Currently, Bitcoin futures contracts expiring in March 2021 are priced 6% higher than the BTC/USD spot price at around $12,280.
“It seems extreme to see BTC-Mar21 trading 6% above spot,” JSterz summarized. “We have been at this level about four times since 2017. If #BTC breaches 13k+ this thing is going to explode.”