Bullish arguments seem to be gaining the upper hand.Cointelegraph
Bitcoin is still alive! This is the first lesson to be learned from the sharp increase in the Bitcoin price observed in the last 48 hours. I personally never doubted it, but for some, what is happening now is an important reminder.
While Bitcoin price had already shown signs of positive evolution last week by moving out of the $9,000 — $9,400 range in which it had been stuck since the beginning of July, everything accelerated on Sunday, July 26, 2020.
Bitcoin’s price was then around $9,600.
Within 24 hours, the Bitcoin price rose sharply to break through resistance one by one. First, the $9,900 resistance was broken, then it was the turn of the $10,500 resistance.
This last old resistance was an important milestone to cross to see the Bitcoin price go higher. Investors were aware of this, and everything followed at breakneck speed.
Within a few hours, the Bitcoin price had risen above $11,000 and even reached $11,400 on some trading platforms. Bitcoin was back at a price not seen since August 2019.
The FOMO feeling is back in the Bitcoin world
Many people ask me what are the reasons behind this sharp increase in the Bitcoin price.
Some people seem surprised to see Bitcoin once again breakthrough that psychological barrier of $10,000 that it has been fighting against for many months now.
To tell the truth, there are many reasons to justify this increase in Bitcoin price.
As I explained in early July, those who called Bitcoin boring were very much mistaken.
They were letting ambient noise distract them from the real signal.
The signal was clear: Bitcoin was strengthening its fundamentals.
Little by little, everything was falling into place so that we would later see a sharp increase in Bitcoin price. You never know in advance when a bull run is precisely going to start.
However, you can identify elements that suggest that we are slowly but surely getting closer to it.
What has been going on in the Bitcoin world over the last few weeks is a good indication that a bull run is going to happen. I don’t know when or even if the current pump will be the start of a bull run around 15K.
But I do know that it will happen within the next 18 months.
This sudden spike in Bitcoin price is not surprising
Over the past several weeks, the good news has been piling up for Bitcoin:
- Grayscale investments has accumulated a huge amount of Bitcoin for its clients who are mainly institutional players.
- Historical opponents of Bitcoin are coming to the fore. Bitcoin is here to stay. PayPal will soon offer to buy/sell Bitcoin to its 325 million users.
- Visa working with Coinbase to “provide a bridge between digital currencies and our existing global network of 61 million merchants.”
- The U.S. banking regulator has just authorized U.S. banks to hold Bitcoin for its customers. While I remain convinced that the banks cannot be part of the solution because they are at the heart of the problem with the current system, this announcement is extremely bullish for Bitcoin.
- A U.S. federal court recently ruled that Bitcoin is a form of money under the Washington D.C., Money Transmitters Act (MTA).
In addition to this good news for Bitcoin, macroeconomic conditions are still uncertain due to the coronavirus pandemic which is about to start the second wave in Europe and Asia. Even worse, the pandemic is out of control in the United States.
This uncertainty is pushing institutional and retail investors to opt for safe havens in times of crisis.
Gold and Bitcoin benefit from the current uncertainty
Gold is currently beating all its historical records. The price of an ounce of gold is close to $2,000. Considered as digital gold, Bitcoin will benefit from this uncertainty.
Bitcoin is a hedge against uncertainty that is accessible to most people, whereas gold is reserved for the richest 1%.
Demand for Bitcoin will continue to grow in the coming months and years.
Gold and Bitcoin will benefit from a weakening of the U.S. dollar, which is the result of the excessive printing carried out by the Fed since March 2020, but also by a U.S. government whose public debt also appears to be out of control.
More than 3 trillion dollars have already been borrowed by the United States in an attempt to limit the effects of the 2020 economic crisis. This is unfortunately not enough. A new recovery plan has to be voted which could well reach 3,000 billion dollars if the will of the Democrats is respected.
The Republicans would like to stay at $1,000 billion when the public debt of the United States has already exceeded $26,500 billion.
All of this will benefit Bitcoin, that’s for sure.
Is a bull run about to start?
Now that you have understood why the price of Bitcoin has been soaring for the last 48 hours, the big question on everyone’s lips is:
Is Bitcoin going to start a real bull run towards $15K?
As always with Bitcoin’s price, it is difficult to answer with certainty. In the short term, it is impossible to give guarantees on the evolution of Bitcoin’s price. In the long term, it is easier, and that is why I consider that being a Bitcoin HODLer is the best possible strategy.
Anyway, a CME gap has formed at $9,600.
Usually, this CME gap is always filled sooner or later. If this were to be the case again this time, we can imagine that Bitcoin’s price will undergo a significant correction in the coming days.
On the other hand, the breaking of the $10,500 resistance has created important new support. A weekly close above $10,500 would strengthen this support and would allow us to look at the $12,000 for Bitcoin more serenely in the short term.
While I consider the current price increase for Bitcoin to be a good thing, I am not convinced that the big bull run we are all waiting for is for now. I think it’s too early yet. I am still considering a major correction before the real bull run can occur.
I am not all-knowing, and I could obviously be wrong.
Keep a cool head, Bitcoin’s goals are much higher
I see a lot of people already talking about the $20K as if that price is going to be reached within the week.
Let’s stay measured, and not give in to greed. You all know that greed is the number one enemy in the Bitcoin world. If you want to fully enjoy Bitcoin, you must learn to control your emotions. That is the key.
Bitcoin’s goals are much higher than just reaching a price of $11,000. We are only at the beginning. In a few years, when Bitcoin price will be well over $100,000, everyone will remember this time as the beginning of something huge.
This is the time you are living in.
You have the unique opportunity to continue to accumulate Bitcoin patiently. Buy Bitcoin, then HODL no matter what. Don’t give in to the sirens of Sh*tcoins, and keep seeing the bigger picture.
The Bitcoin revolution is just beginning, and there’s no need to be euphoric because Bitcoin’s price is $11,000. Imagine how you will feel when it reaches $30,000 and then $50,000.
So my advice to end this story is simple: Keep a cool head and enjoy your adventure that is just beginning in the Bitcoin revolution. Your best days with Bitcoin are always ahead.