As a seasoned researcher with over two decades of experience in the financial markets, I have seen my fair share of bullish trends and bubbles. However, the current surge in Bitcoin‘s price is truly unprecedented, even for this digital asset.
The price of Bitcoin continues to climb steadily, hitting a new record high of $107,800. MicroStrategy invests an additional $1.5 billion in Bitcoin, while US Spot Bitcoin ETFs are also making significant purchases.
Institutional and sovereign buying
Despite Bitcoin potentially reaching an oversold state, the relentless institutional demand continues to drive the price ever higher.
MicroStrategy increased its Bitcoin holdings once more by purchasing an additional 15,350 Bitcoins for approximately $1.5 billion, raising its total investment in the cryptocurrency to a staggering 439,000 BTC.
On Monday, MicroStrategy and other buyers followed suit, but at a slower pace compared to Blackrock’s IBIT ETF. In fact, IBIT was responsible for a significant portion – about $418.80 million – of the total inflow of $637.50 million into U.S. Spot Bitcoin ETFs on that day. With nearly daily purchases by Blackrock IBIT, its Bitcoin holdings have now surpassed 539,020 BTC.
If we consider the possibility that certain countries might be covertly purchasing or mining Bitcoin, it could account for the current demand driving up its price.
Channel breakout or rejection?
Looking at the 4-hour chart displayed, you’ll notice that the Bitcoin (BTC) price is presently moving within an uptrend channel. This price movement has touched the upper boundary of the channel for the third time, thereby validating the pattern. Now, we wait to find out if the price will be pushed back down due to resistance or if strong buying activity will propel it beyond this level.
In most instances, these patterns suggest a potential rejection, but since we’re talking about Bitcoin, it’s wise to anticipate the unpredictable. If the price falls, there are two potential horizontal support levels that have recently developed: one at approximately $103,800 and another at around $99,600. The uptrend would be invalidated if we see a drop below $91,000.
Long-term bearish divergence in play
As a point of interest. Looking at the 2-week chart for $BTC, one can see that the current price is just making contact with an ascending trendline that touches both preceding bull markets. If one also looks at the RSI at the bottom of the chart, the trendline for those tops is descending. This points to bearish divergence. The only way to nullify this is for the indicator line on the RSI to rise above this line, and also above the previous top earlier this year.
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2024-12-17 14:01