While this rally in the price of Bitcoin may be starting at almost the same time as the major one in late 2017 did, there are a lot of differences to be seen. It has been rather rapid, but nowhere as explosive as 2017, and perhaps the $20,000 mark is still a while off yet.
Bitcoin was sitting around $10,000 at the beginning of September and has been steadily climbing ever since then. It took a month from September 2 to make it to $11,000, then 11 days to breach $12,000; it took only two more days to hit $13,000; two weeks past before $14,000 came in and then from $14,000 to $18,000 it has also been two weeks.
In this time there has been very little correcting or pull backs and the rally has only gotten more rapid as there was always predicted to be very few resistance levels, but will a resistance level come and pull back the price before $20,000 is crossed again?
Still marching on
According to Decentrader co-founder, filbfilb, Bitcoin price could continue to march higher in the short-term if key underlying supports hold.
“The current PA could still very easily result in a blow-off towards the Golden Ratio Multiplier, currently at 19k.”
Analysts were expecting the price to briefly consolidate in the $17,500 to $17,700 range as some traders took profits, but bulls appear intent to push BTC higher. To date, Bitcoin has rallied 13% since breaking through the $16,000 resistance, therefore a period of consolidation to build support for the next leg up is healthy and expected.
As for the fundamentals behind today’s price move and the possible outcomes for the short-term, Matt Blom, the head of global sales trading at EQUOS said:
“The market has extended to the upside, breaking above the trend channel and appears to be entering a blow-out phase. With a strong bull market, the tendency is to call a top, for me, the question is at what point does the rally become unsustainable.”
Reject or rally
As Bitcoin stormed through the $17,000 level, there was a lot of talk about whether the price would reject near the 2017 high or break through the ‘resistance’ and rally to a new all-time high.
According to Blom:
“If we drive up to $19,050 this week, I would expect a pullback to the $17,000 level. There’s a lot of new money in Bitcoin, they’ve never experienced a Bitcoin retracement! In the past, Bitcoin has retraced sharp up moves, but this time, there is one missing ingredient! The lack of auto-liquidation of leveraged longs.”
In 2017, the rally was driven purely by retail traders and a huge amount of FOMO, but in 2020 the scenario is much different.