Bitcoin reached its record high near the level of $42,000. During two weeks, from December 28 to January 8, bitcoin soared by more than 100%. At the moment, crypto traders are interested only in one question – whether bitcoin can reach new highs.
To answer the question, we should find out the key reasons for such a jump. Thus, the coronavirus pandemic and the virus-induced crisis forced central banks to lower the key rates to almost zero and launch the massive money printing. The quantitative easing program is likely to last long and markets are poured with cheap liquidity. Against this background, the US dollar has already slumped. Moreover, the possibility of the adoption of a new stimulus package by US President Joe Biden will create additional pressure on the greenback.
Big players stopped investing in the US dollar. The traditional financial system lost trust of investors and they began searching for the alternative instruments. Some of them chose cryptocurrencies, bitcoin in particular, as the safe-haven asset that may replace the greenback. We cannot say that all market players made the same decision. However, even funds of the US large universities began investing in cryptocurrencies. Moreover, Elon Musk said that he was a “supporter” of bitcoin.
Thus, bitcoin has ground for a further rise. However, it is unknown when the jump may happen. The second all-time high was hit only three years after bitcoin reached its first record high. However, analysts suppose that this time we will not have to wait for so long.
Scott Minerd, who holds the post of IT director at Guggenheim Partners, recently stated that the number of institutional investors who were investing in bitcoin is not enough even to keep the main cryptocurrency above $30,000 per coin. Although, before that, he claimed that bitcoin had the potential to grow to hundreds of thousands of dollars.
Experts at JPMorgan pinpointed that the price would hardly consolidate above $40,000 in the near future. They foresee a significant downward correction.
At the same time, on the daily BTC/USD chart, we can see a triangle. Its formation proves the fact that bitcoin may move in either direction.
The material has been provided by InstaForex Company – www.instaforex.com
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