3 Crucial Reasons Why Bitcoin Shot $1,500 Higher This Past Week

Bitcoin has shot around $1,500 higher over the past week, reaching a weekly high of $13,200. The price of the leading cryptocurrency has dropped slightly to $12,900 as of this article’s writing, just shy of the highs and the pivotal $13,000 resistance level.

This recent move higher caught many traders off guard. During one day this week, over $300 million worth of Bitcoin short positions were liquidated, along with some long positions amid some volatility.

Three Reasons Why Bitcoin Is Moving Higher

Crypto-asset lender Nexo released a report this week postulating as to why Bitcoin moved seriously higher this past week. In the past seven days, the leading cryptocurrency has shot $1,500 higher.

Nexo gave three reasons why the cryptocurrency has done so:

  • Firstly, analysts say that the global markets are pricing in a democratic win for the Presidential Election of 2020. Analysts say that this will ensure that there is more fiscal stimulus coming, which will result in the devaluation of the U.S. dollar and a relative rally in the price of Bitcoin. The firm wrote on the matter: “First, the ‘Blue Wave’ narrative of a Democrat sweep in US elections has many of us thinking that a lot more fiscal stimulus and money printing are coming, boding well for currency hedges.”
  • Secondly, more institutional capital continued to flood into Bitcoin and this market this past week. U.K. fintech company Mode revealed it would deploy some of its cash into BTC. Also, Grayscale Investments shared it has seen massive institutional investment after already reporting a record quarter of over $1 billion in investment.
  • Lastly, PayPal confirmed its support of cryptocurrencies this week with an intent to support the purchase and sale of top coins like Bitcoin, along with digital asset payments. There are also rumors that the company is looking to acquire crypto firms, namely BitGo.

Technical Trends Also Bullish

The technical trends are also bullish.

One crypto-asset analyst that predicted BTC would see a V-shaped reversal amid the brutal March crash shared a chart showing that Bitcoin formed its highest daily candle close since January 2018. 

Image

Chart of BTC's price action since the middle of 2017 with analysis by crypto trader Bitcoin Jack (@Btc_JackSparrow on Twitter). Source BTCUSD from TradingView.com
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Price tags: xbtusd, btcusd, btcusdt
Charts from TradingView.com
3 Crucial Reasons Why Bitcoin Shot $1,500 Higher This Past Week

Bloomberg Intelligence Strategist Hints At Bitcoin Bull Run In 2021

Earlier in 2020, Bloomberg Intelligence claimed Bitcoin would soon reach $12,000 and would be a primary beneficiary in the post-pandemic world. The prediction coming true has the analyst who made the call sharing a new chart that appears to hint that the cryptocurrency is about to explode into another bull run, much like it did in 2017.

Here’s what to expect if yet another forecast from the Bloomberg Senior Commodity Strategist is once again accurate.

Bloomberg Senior Commodity Strategist: “Firmer” Crypto Market To Come In 2021

The year of 2020 will be remembered in the history books for several key reasons. It is the first widespread pandemic the modern technological world has ever seen, the fiat currency is failing, and the tied are turning for Bitcoin.

Early on in 2020, a Bloomberg Intelligence report on Bitcoin gave a general health update on the cryptocurrency, comparing it to the dollar, gold, Nasdaq, and more.

Related Reading | “Massive” Wave Of OTC Buying Could Be Behind Bitcoin Bull Impulse

The cryptocurrency’s relative volatility compared to the Nasdaq dropping to pre-bull market levels was an early tell for Bloomberg that something was about to happen in Bitcoin.

The report also claimed that $10,000 would be broken soon enough and that the cryptocurrency would set its sights on $12,000. It did, and then some – tapping well over $13,000 this week.

Now Mike McGlone, Senior Commodity Strategist for Bloomberg has shared a new chart comparing Bitcoin against the Nasdaq stock market index and is using it to hint at a potential bull run in the making.

Nasdaq “Underperformance,” “Diminishing Supply,” and 80% Correction Support Bitcoin Bull Run Breakout

With Bitcoin deviating away from the Nasdaq stock index, the underperformance could sooner than later turn into overperformance, much like another point in the cryptocurrency’s recent history.

McGlone points to a previous deviation, that after breaking to the upside took Bitcoin another 235% before a more sizable correction took place.

bitcoin bloomberg mcglone

Bitcoin gained 235% after the last deviation from Nasdaq | Source: BTCUSD on TradingView.com

Another 235% push from current prices, would take Bitcoin to roughly $38,000 per BTC, and almost double the asset’s 2017 all-time high.

The Senior Strategist points to “diminishing” BTC supply, the bear market, and regaining lost ground against Nasdaq as key factors pointing to a bullish breakout.

Related Reading | Paul Tudor Jones: Bitcoin Is In First Inning, Like Investing In Apple Or Google Early

In addition to Bitcoin’s supply diminishing, it’s also capped at just 21 million BTC. The money supply increase by 20% in 2020 alone and the cryptocurrency could act as a hedge against fiat currency hyperinflation.

Featured Image From Deposit Photos, Charts From TradingView.com, Bloomberg Intelligence

These Factors Show DeFi is Bullish Despite 50%+ Drop Seen by Many Crypto Tokens

The DeFi sector has been struck hard by the recent downturn seen across the aggregated crypto market, but it has not been able to match the momentum seen by Bitcoin and Ethereum as a result of their recent rallies.

DeFi tokens – due to their immense volatility – are considered to be “high beta,” which means that their prices will only rise when investors are comfortable and confident that the macro landscape is stable.

Until BTC and ETH can stabilize around their current price levels or continue their ascents, the DeFi sector may continue stagnating.

One analyst is noting that this relatively small fragment of the crypto market is still incredibly bullish from a fundamental standpoint.

To justify this sentiment, he points to the total value locked and the market capitalization of ERC-20 stablecoins.

He also notes that although DeFi remains bullish, it’s a matter of timing regarding when quality tokens within the space will begin rising again.

DeFi Sector Stagnates Despite Rallies Seen by Broader Crypto Market

Bitcoin’s decline from highs of $12,400 in late-August is what began placing headwinds on the entire market that ultimately resulted in the short-term downfall of the DeFi sector.

Once Ethereum’s price collapsed from $490 and began reeling lower, the sector’s short-term fate was sealed, and many tokens began posting massive losses daily.

Bitcoin and Ethereum are now rebounding, with ETH trending up towards its yearly highs while BTC sets fresh ones.

This indicates that capital may soon spill over into higher risk crypto assets, but it remains unclear when this rotation might occur.

Investor: Two Key Metrics Show How Bullish DeFi Currently Is 

One prominent crypto investor and Ethereum-focused analyst explained in a recent tweet that two key metrics show just how bullish the DeFi market truly is at the present moment.

He points to a total value locked (TVL) of $12.41 billion, as well as $14 billion stored within ERC-20 stablecoins.

“Despite a month that saw most tokens fall 50% or more, DeFi is *still* at ATHs with its most important indicators: – TVL: $12.41B – ERC20 Stablecoins: $14B. Don’t listen to the degens who burned out. Phase 2 of this DeFi bull market will make this summer look like nothing.”

As for when this part of the crypto market might begin resuming its uptrend, he believes that the election will be the “inflection point” for phase 2 of the bull run.

Featured image from Unsplash.

Two Strong Ethereum On-Chain Trends Suggest the Trend Is Bullish

Ethereum has undergone a strong rally over the past few days amid a Bitcoin push higher. In the past seven days, ETH has gained around 10%, pushing from the $370 region to $410 as of this article’s writing. ETH is expected to push higher as there are fundamental and on-chain trends that favor bull trends.

Key Ethereum On-Chain Trends Bullish

Ethereum is expected to move higher in the days and weeks ahead as on-chain trends remain bullish. Santiment, a blockchain analytics firm, recently shared the chart seen below, showing that the number of active ETH addresses has increased while miners aren’t selling:

“There is good news and bad news for #Ethereum’s quest to again surpass the $420 price barrier. The good news is that miners aren’t selling, and there is a big increase in new $ETH addresses being created, and pre-existing addresses have shown an increase in activity. The bad news is that social sentiment is bordering on euphoric territory, and daily active deposits have jumped in a big way.”

Ethereum

Chart of ETH's price action over the past few months with an overlay of miner balances. Chart from Santiment

ETH Technicals Also In Positive State

The technicals for the leading cryptocurrency are also in a positive state. One crypto-asset swing and day trader recently shared that with the push above $395, a move towards $490 is becoming increasingly likely:

“Nice break above the $395 flat top on $ETH. ETH doesn’t always give throwbacks, so a $395 throwback is certainly possible before higher, but I wouldn’t be on it. Otherwise, this looks good for a run back near the $490 highs.”

Others echoed this sentiment.

Ethereum crossing above the pivotal resistance levels in the $390-400 range is pivotal for the bull case. ETH holding above that region should result in further gains in the weeks ahead.

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Two Strong Ethereum On-Chain Trends Suggest the Trend Is Bullish

Social Volume Surrounding Bitcoin Suggests Its Uptrend is About to Slow

Bitcoin’s intense multi-day uptrend is slowing as the cryptocurrency reaches $13,000. A confluence of positive news regarding BTC’s adoption amongst corporations helped drive this recent push higher, but it remains unclear how long this uptrend will last.

Bears have been ardently trying to stop the cryptocurrency from breaking above $13,000. Each time it reaches this price region, it sees heightened selling pressure that slows its ascent.

If this selling pressure continues persisting in the near-term, it could spark a retrace that causes the benchmark cryptocurrency to cut into its recent gains.

It remains unclear whether this potentially imminent retrace will invalidate the bullish market structure established throughout the past few days.

One analytics firm explained in a recent tweet that Bitcoin’s “social volume” saw a massive surge this week.

They note that the “peak hype” phase seen during pumps like that which is ongoing can often mean that consolidation or a retrace is imminent.

This may not bode too well for Bitcoin in the near-term, as a confluence of peak euphoria amongst investors, coupled with resistance in the lower $13,000 region, could signal that some downside is imminent.

Bitcoin Consolidates as Resistance in Lower-$13,000 Region Mounts

At the time of writing, Bitcoin and the aggregated cryptocurrency market are caught within a consolidation phase as BTC struggles to break above $13,000.

It is currently trading down slightly as it hovers just below this key level, with bulls and bears deadlocked as they both try to take the reins.

Whether or not $13,000 is firmly surmounted in the near-term will likely provide some significant insights into where it trends in the days and weeks ahead.

Analytics Firm: BTC’s Social Volume Suggests Consolidation is Imminent

Analytics firm Santiment explained in a recent tweet that Bitcoin’s rocketing social volume suggests that consolidation or a retrace is imminent.

“Extreme social volumes during pumps can often signal ‘peak hype’ and increasingly irrational market confidence. This doesn’t necessarily a mean a full collapse is imminent, but it does generally lead to consolidation.”

Bitcoin

Image Courtesy of Santiment.

The longer Bitcoin remains trapped beneath $13,000, the lower its social volume will likely trend.

Because this is often viewed as a counter indicator, this could mean that a short-term consolidation phase in the upper-$12,000 region will ultimately prove to be bullish for Bitcoin.

Featured image from Unsplash.
BTCUSD pricing data from TradingView.

Bitcoin Could Be Just One Week Away From A New Monthly All-Time High Close

Bitcoin is just over one week away from the October monthly close, taking place on Halloween night. Although the night is known for candy, scarces, and tricks, if the leading cryptocurrency by market cap can close above $14,000, investors will be in for one heck of a treat.

Bitcoin October Monthly Candle Close Could Result In New All-Time High

Bitcoin price is trading well above $12,000 after a $1,000 intraday candle earlier this week that sent the cryptocurrency to a new 2020 high. The top-ranked crypto asset, however, failed to set a new higher high over its 2019 peak, if you measure wick to wick.

But when switching to a line chart, which shows only a close-by-close basis, Bitcoin is only a few hundred dollars away from setting a new all-time high.

Related Reading | Crypto Analyst: Altcoins To “Tank” While Bitcoin Runs For All-Time High

This makes the October 31 monthly close more than just Halloween – it puts the potential bull run on the line.

bitcoin btcusd monthly

Bitcoin flips high timeframe resistance as support, aims for new all-time high monthly close | Source: BTCUSD on TradingView.com

The line chart also shows a very clear retest of resistance broken, confirming it as support before moving higher. If the leading cryptocurrency by market closes over $13,950, then the new bull market breakout could be confirmed.

Like the resistance level below, a retest is likely, then it could be off to the races for Bitcoin from there.

Will The Top Cryptocurrency Benefit From “The Halloween Effect?”

Markets are cyclical and even seasonal in their behavior. For example, there’s a saying recommending to “sell in May and go away.”

Six months later, however, due to seasonality “the Halloween effect” kicks off what tend to be higher performing months for most assets.

Related Reading | Paul Tudor Jones: Bitcoin Is In First Inning, Like Investing In Apple Or Google Early

Q4 2017 was the quarter that took Bitcoin to $20,000 in a flash, and it could happen again.

bitcoin btcusd monthly

Current cryptocurrency market cycle matches previous bull breakout | Source: BTCUSD on TradingView.com

According to the same monthly line chart from above, when zoomed out, shows almost the exact same structure as the last bear market and bull market breakout.

Bitcoin price couldn’t close its first few monthly attempts at a new all-time high until the year turned anew. At that point, the election uncertainty had cleared the air, and Bitcoin at that point was free to run straight through resistance, and never looked back.

Will the Halloween effect lead to another crypto bull market once again?

Featured Image From Deposit Photos, Charts From TradingView.com

While DeFi Tokens Dropped, Total Value Locked Kept Climbing

Since the summer peak of the DeFi explosion, top Ethereum-based tokens from the space have dumped considerably due to becoming overvalued too quickly, and Bitcoin suddenly stealing up any flowing capital share.

But while this happened, the total USD value locked in DeFi applications continued to climb right along as if nothing ever happened. Is this a sign that the decentralized finance space is fundamentally sound, or is this a recipe for disaster waiting to happen?

Top DeFi Tokens Come Tumbling Down, Total Value Locked Defies Gravity

As well as Bitcoin has performed, getting its footing and potentially gearing up for a big bullish breakout, 2020 has been the year of Ethereum and DeFi.

These Ethereum-based ERC20 tokens have stolen the show when it comes to the crypto industry lately. Prices rocketed while the total value locked in DeFi applications ballooned. But in the summer months, the sizzle started to slow, and valuations came down.

Related Reading | DeFi Overtakes Ethereum In The Media, Data Shows

Yearn.Finance, Aave, Uniswap, and several others nosedived 60% or more from their summer highs, but something interesting has happened along the way.

While asset valuations came down, more money has been pumped into DeFi applications, according to the continued growth in Total Value Locked.

yfi defi pulse yearn finance ethereum bitcoin

DeFi tokens fell hard, but TVL continued to climb. What does this say about fundamentals? | Source: YFIUSDT on TradingView.com

Timber: TVL Could Come Down Too If Decentralized Finance Coins Can’t Recovery Quickly

TVL keeping pace even while valuations come back to reality is a sign that fundamentals are strong in the category, and it could suggest that the correction is healthy and could lead to far higher prices in the future.

Or it also could suggest that the DeFi trend itself hasn’t yet reversed, even though asset uptrends have.

Related Reading | Trader Warns Of “Capitulation Volume” And “Heavy Downside” Across DeFi

Top crypto analysts warn that despite the major drawdown in DeFi tokens, there has yet to be capitulation volume in pairs related to Yearn.Finance, Uniswap, and more.

Either that capitulation volume never comes, because prices pick right back up and continue to spike or TVL growing could also be a recipe for disaster.

If the DeFi TVL starts to come down, and that chart’s parabola breaks, it could – like any other chart – see a major correction. Parabolic assets drop as much as 80% when the advance is finally broken. Could the same statistic apply to TVL?

Featured Image From Deposit Photos, Charts From TradingView.com, DeFi Pulse

This “Green Wave” is About to Lift Chainlink Significantly Higher, Claims Analyst

Bitcoin’s recent upsurge is finally proving to be beneficial for altcoins, as many have been able to post notable gains throughout the past day, including Chainlink.

LINK has been one of the best performing major altcoins over the past 48 hours, as it has put some serious distance between its current price and its recent lows.

This strength isn’t too surprising, as the cryptocurrency tends to outperform the market during uptrends.

It does appear to be consolidating at the moment, however, as bulls have been struggling to propel it past $12.00.

The resistance sitting at this price region is significant. Unless Bitcoin or Ethereum trend higher today and create a tailwind for the rest of the market, it is unclear whether bulls will easily surmount it.

One analyst is noting that Chainlink is entering a fresh uptrend – according to one indicator.

While pointing to the crypto’s Renko candle chart with a guppy indicator overlaid, he observed that its trend is turning green for the first time in ages, which indicates that another parabolic move higher is brewing.

Chainlink Consolidates Below $12.00 as Buying Pressure Ramps Up

At the time of writing, Chainlink is trading up just over 1% at its current price of $12.05. This is around where it has been trading for the past 24 hours, as bulls have been ardently trying to secure its position within the $12.00 region.

It is important to note that each push above this level has resulted in selloffs that send it down towards $11.80.

With Bitcoin and Ethereum both consolidating, it is unclear whether LINK will see any serious near-term momentum.

Analyst: LINK is About to Enter a New “Green Wave”

One analyst explained that Chainlink’s recent surge has been significant for its market structure.

He points to its guppy indicator turning green for the first time in ages, noting that this suggests a “green wave” is imminent – indicating that it will soon see significantly further gains.

“LINK has emerged from the cloud of red. On to pasture new, and greener. I’m not looking for specific targets (aside from the near term retest of $11.50 and an upper resistance of $13). The green wave is what I’ll ride.”

Chainlink

Image Courtesy of Cold Blooded Shiller. Source: LINKUSD on TradingView.

Bitcoin and Ethereum will likely continue guiding the entire altcoin market, making it vital for Chainlink that they break out of their consolidation phase and push higher.

Featured image from Unsplash.
Charts from TradingView.

Analyst: If Yearn.finance (YFI) Surmounts $16,000, It Could Start a New Uptrend

Yearn.finance has seen a decent rebound from its recent lows set just a few days ago.

Its ongoing upswing is coming about as Bitcoin and Ethereum consolidate, which indicates that it may be breaking its recent downtrend and beginning to navigate higher as many altcoins start catching some tailwinds created by BTC and ETH’s recent upswing.

There are still some underlying problems that are hampering YFI’s growth, with the Yearn ecosystem currently being caught within a vicious cycle limiting how much value is captured by the token.

Furthermore, the founder’s risk that has been priced into YFI may also be limiting its near-term upside, as Yearn founder Andre Cronje has been playing with multiple experimental projects that have cost speculators significant sums of capital.

There is one key technical level that, if broken, could send it rocketing significantly higher in the coming few weeks.

A further rejection at this level could spell trouble for its near-term outlook and lead to further downside. One analyst is even pointing to $6,000 as a potential downside target.

Yearn.finance Struggles to Gain Momentum Despite Bullish Market

Yearn.finance’s YFI token is currently trading up 5% at its current price of $14,500. This marks a notable surge from its multi-day lows of $13,000 set just a few days ago.

It is important to note that it is still caught within a consolidation phase, as it has been trading around its current price for the past couple of weeks.

Until it breaks above $16,000 and begins marching back up towards $20,000, its technical outlook still slightly favors bears.

Furthermore, the lack of attractive yields on the yVaults leads less value to be captured by YFI, which is hampering its technical strength.

Analyst: YFI Must Break $16,000 to See Further Momentum

While sharing his thoughts on the Yearn.finance token’s technical outlook, one analyst explained that $16,000 is a key level that YFI must overcome in the near-term.

He also notes that a breakdown before here could be dire, putting forth a $6,000 target on the chart he offers below.

“Another diagonal for YFI. $16k is still the level to overcome in order to see strength for continuation. 2 failed/awkward breaks of diagonals previously. Let’s see how we do today.”

Yearn.finance YFI

Image Courtesy of Cold Blooded Shiller. Source: YFIUSD on TradingView.

Yearn.finance’s near-term technical strength may also reflect that of the aggregated DeFi sector, which means that inflows of capital into beta assets following Bitcoin’s surge could provide it with a boost.

Featured image from Unsplash.
Charts from TradingView.

Charted: Chainlink (LINK) Starts Fresh Rally, Indicators Suggest A Run To $14

Chainlink (LINK) started a strong rally after a major correction towards the $9.80 level. The price is up over 20% and it is likely to continue higher above the $12.50 resistance.

  • Chainlink token price is surging and it recently broke the $12.00 resistance against the US dollar.
  • The price is still trading well above $11.80 and the 100 simple moving average (4-hours).
  • There was a break above a crucial declining channel with resistance near $11.00 on the 4-hours chart of the LINK/USD pair (data source from Kraken).
  • The pair is consolidating gains, but it is likely to continue higher above the $12.50 resistance level.

Chainlink (LINK) Price Turns Green

After a major downside correction (as discussed in the previous analysis), chainlink (LINK) found support near the $9.80 level. A low was formed near $9.79 before the price started a strong upward move.

Bitcoin and ether gained traction in the past few sessions, resulting in a strong rally in altcoins such as litecoin, ripple, LINK, and bitcoin cash. LINK gained over 20% and it broke many hurdles near $10.00 and $11.00.

The recent increase was initiated after there was a break above a crucial declining channel with resistance near $11.00 on the 4-hours chart of the LINK/USD pair. The pair broke the main $11.50 resistance and settled above the 100 simple moving average (4-hours).

Chainlink (LINK)

Source: LINKUSD on TradingView.com

It surged above the $12.00 resistance and traded to a new monthly high near the $12.46 level. The price is currently correcting lower and trading below $12.20. There was a test of the 23.6% Fib retracement level of the recent rally from the $9.79 low to $12.46 high.

The next major support is near the $11.85 and $11.65 levels, below which the bears might aim a test of the 50% Fib retracement level of the recent rally from the $9.79 low to $12.46 high.

On the upside, an initial resistance is near the $12.20 level. The first major hurdle is near the $12.50 level, above which the price could rally towards the $13.20 level.

Downside Correction?

If chainlink’s price starts a downside correction below the $11.80 support, there are chances of an extended decline in the coming sessions.

The next major support is near the $11.20 level, below which the bears are likely to aim a test of the 100 simple moving average (4-hours) at $10.60 in the coming days.

Technical Indicators

4-hours MACD – The MACD for LINK/USD is now gaining pace in the bullish zone.

4-hours RSI (Relative Strength Index) – The RSI for LINK/USD is now well above the 65 level.

Major Support Levels – $11.80, $11.65 and $11.20.

Major Resistance Levels – $12.20, $12.50 and $13.20.