Analytics / Forex and Crypto News
The fact that the price of Bitcoin rose above $16000 came as a surprise not only to traders but also to analysts themselves. If you look at the chart of the pair BTC/USD, the price has risen by 128% since the beginning of the year, and by more than 200% since the March collapse. And now the price is at the highest level in the last 2 years. And now everyone is interested in the question of how long the Bitcoin price will last above the level of $16000. In March, we already saw how the price dropped by half within a couple of days. Therefore, a new decline in the price of Bitcoin should not be ruled out. And it may not be related to the state of the cryptocurrency market, but to global problems with which the world may face in 2021.
Last week, we saw a correction in the price of the pair BTC/USD, which was triggered by macroeconomic factors. By the way, it is worth noting that the correction began after the news that the Pfizer company had entered the final stage of developing a vaccine against COVID-19. This brought some clarity to the pandemic issue. Also, the price of Bitcoin began to decline when it became clear that J. Biden would become the new president of the United States. Thus, it can be assumed that Bitcoin grows when uncertainty in the world increases. And the more uncertainty there is in the world, the higher the price of Bitcoin will be.
On the other hand, it is worth noting an increase in the inflow of investments to exchanges. Sellers taking profits by selling bitcoins at $16000. At the same time, there is sufficient demand and purchasing power. This is evidenced by the growth in the intensity of trading on exchanges.
In this situation, Bitcoin confirms its status as digital gold. Now it works even better than gold. The gold supply is limited and ceases to fulfill its functions. And investors are leaving the stock and bond markets in anticipation of a new peak in the pandemic and a decline in bond yields.
However, when investing in Bitcoin, investors should pay attention not only to the price increase but also to its decline.