Bitcoin broke resistance at $ 20k and will set a new milestone for it

Today December 16, 2020 is the days of the winter break, and Bitcoin’s price has set a record for the first time in Bitcoin history to surpass the $ 20,000 mark, will it make a glorious era? Is it more royal to it in the financial markets?

BTC/USD weekly chart. Source: Tradingview

At the same time, this rally is different from 2017’s due to several reasons that could help BTC soar even higher. These include growing institutional demand, the increasing perception among investors that BTC is a store of value, and stronger network fundamentals.

Institutional demand is fueling the Bitcoin rally

In December 2017, data suggested that retail and mainstream investors were behind the Bitcoin rally. At the time, CME BTC futures had just launched and there was a lack of institutional investment vehicles.

As such, the rally was mostly fueled by retail investors, which came to an abrupt stop after a strong whale-induced sell-off.

This time, institutional investor-focused platforms are seeing an explosive increase in trading activity. For instance, the CME BTC futures market recently notched a $1.27 billion open interest, ranking just behind OKEx as the second-largest in the global Bitcoin market.

Institutional investors are not likely to invest in Bitcoin with a short-term strategy. Many are increasingly viewing it as a digital store of value and an alternative to gold.

As Cointelegraph reported earlier, the rise in Grayscale’s Bitcoin Trust premium, suggests that institutions are increasingly looking for exposure to BTC and paying above spot market price for the privilege.

BTC is increasingly viewed as a store of value
Both institutions and high-net-worth investors are starting to acknowledge Bitcoin as a store of value and as a treasury asset.

MicroStrategy, the publicly-listed company in the U.S. that purchased $450 million worth of BTC earlier this year, sparked a trend that has led other institutions to allocate their capital into Bitcoin.

The perception of BTC as a hedge against inflation and a stable store of value could make BTC compelling for the broader financial sector in the medium to long term. Michael Saylor, the CEO of MicroStrategy, said:

“Bitcoin is the world’s best treasury reserve asset and the emerging dominant monetary network. It is the solution to the store of value problem faced by every individual, corporation, and government on earth. As this news gets out, the world is going to change for the better.”

At the same time, Bitcoin’s performance has dwarfed gold’s this year once again as well as the S&P500’s, despite the precious metal and the latter breaking their own all-time highs this year.

Hence, it is no surprise that Wall Street is now taking Bitcoin more seriously than in 2017. Further evidence of this was revealed on Dec. 3 when the S&P 500 announced that it plans to roll out their own cryptocurrency indexes next year.

Bitcoin’s fundamentals are stronger than ever

As Cointelegraph reported, Bitcoin’s fundamentals are stronger than ever as the network is now moving $500,000 per second around the globe. In other words, Bitcoin transfers $4.627 billion in value per day.

Bitcoin network hash rate. Source:

The network is also ten times more secure than in late 2017 as the hash rate and mining difficulty continue to hit new high this year. The hash rate indicates how much computing power is being dedicated to validating Bitcoin transactions and securing the network.

Bitcoin hits 2-week high, breaking last big resistance before $20K

Bitcoin hitting its highest level since the start of December reignites the quest to crack $20,000 resistance. Bitcoin (BTC) hit its highest levels in two weeks on Dec. 15 as fresh bullish action took the largest cryptocurrency to nearly $20,000.

Highest BTC price since Dec. 1

Data from Cointelegraph Markets, TradingView and Coin360 show BTC/USD hitting $19,760 during trading on Wednesday.

BTC/USD 3-day chart. Source: TradingView

The move reverses the bearish sentiment that characterized the market as recently as Tuesday. After failing to crack resistance between $19,500 and $20,000 since the start of the month, Bitcoin saw lows of $17,550 before reversing upwards.

This week, the reemergence of buyer support intensified, with Bitcoin showing a clear desire to quash the major seller wall at $20,000 once and for all.

As Cointelegraph noted, beyond $20,000, little is in the way for Bitcoin as it hits uncharted territory, with only minor selling planned at higher levels, data shows.

BTC/USD buy and sell levels on Binance as of Dec. 15. Source: TensorCharts

“#Bitcoin breaking above the resistance zone, which is close to a new all-time high. Bullish!” Cointelegraph Markets analyst Michaël van de Poppe summarized to Twitter followers about the latest movements.

“However, you’d want this red zone at $19,400–19,500 to become support. If that happens, price can continue towards $20,500–21,000.”

Quantitative analyst PlanB meanwhile suggested that reports of the United States agreeing on a $900 billion coronavirus stimulus package was contributing to Bitcoin’s gains.

At press time, Bitcoin circled $19,700 as volatility remained heightened on short timeframes. Stock markets were also up on the day.

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