For the third or fourth day in a row, Bitcoin (BTC) bulls have taken control of the cryptocurrency market. Case in point, just hours ago as of the time of writing this, the leading cryptocurrency hit $8,000 for the first time in over six weeks, registering a nearly 8% gain in a single day.
Altcoins, too, have benefited from the bullish momentum. Ethereum has basically traced Bitcoin, posting gains effectively identical to the market leader, though other cryptocurrencies, like XRP, Monero, and Stellar Lumens, have absolutely exploded, posting gains of around 10% as buyers have stepped in.
While the upward momentum has slowed for the time being, with Bitcoin retracing to $7,850 as of the time of writing this, analysts are convinced that bulls are poised to take the price of BTC higher in the coming days for a confluence of reasons.
Bitcoin Poised to Boom Higher
Josh Olszewicz, an analyst at Brave New Coin, recently noted that an inverse head and shoulders chart pattern — a bullish pattern that is likely to mark a strong bottom for BTC — is playing out for Bitcoin.
He remarked in a TradingView post outlining his trading idea that should BTC hit $7,525 (and it has, easily), a move to the $8,100 to $8,700 range — a 7% and 14% rally, respectively — is likely to play out.
As to why the rally will stop there, he cited a confluence of a few key resistances: the 200-day exponential moving average, the daily Ichimoku Cloud, a yearly pivot point, and the weekly 20 moving average.
Also, a trader has noted that Bitcoin’s on-balance volume reading — an indicator which “uses volume flow to predict changes in stock price” — is printing a clear falling wedge pattern, a chart pattern marked by falling prices (or in this case, a reading) and a tightening range.
In this case, the falling wedge seems bullish, with the Bitcoin-related on-balance volume reading rallying, implying imminent continuation to the upside.
Strong Fundamental Trend
Bitcoin’s seemingly positive charts and technical indicators have been underscored by the strong fundamentals.
As noted by digital asset manager Charles Edwards, Blockchain.com, a cryptocurrency information and wallet service, found that Bitcoin’s hash rate — the measure of computational power processing BTC transactions — hit a new all-time high on the 1st day of 2020. The all-time high, 119 exahashes per second, or 119 with 18 zeroes after it.
Bitcoin starting 2020 with a BANG.
Hash Rate hit a new all time high on 1/1/2020: 119M TH/s.
Finally broke above the last ATH set more than 2 months ago in October.
Bitcoin Network stronger than ever before 💪
Happy New Year! 🍾 pic.twitter.com/c0dfvewXfy
— Charles Edwards (@caprioleio) January 2, 2020
This surge in the hash rate breaks the previous all-time high set more than two months ago in October, meaning that Bitcoin’s network is now stronger than ever before, marking an amazing start to 2020.
Indeed, as further pointed out by cryptocurrency trader The Moon, BTC’s hash rate is eight times higher than it was back during the $20,000 top of 2017, implying to him that the price of the leading cryptocurrency is “about to explode SOON!”
The surging hash rate confirms a signal by an indicator tracking the health of Bitcoin’s miners that “miner capitulation” is over. Miner recoveries following cases of miner capitulation have historically marked macro bottoms in the Bitcoin market and preceded bull rallies that had an average 5,000% gain, according to an analysis by Edwards.
Not to mention, industry executives expect 2020 to be a positive year for the cryptocurrency market in terms of institutional involvement.
- Changpeng “CZ” Zhao, chief executive of crypto giant Binance, was quoted as saying that he thinks 2020 will have a more bullish cryptocurrency market because of an “increasing amount of interest from institutional players.”
- Peter Johnson, Principal at Jump Capital, has echoed this, writing in an op-ed for The Block that the expects global macro investors, who focus on long-term narrative shifts on an Earth-wide scale, to begin to siphon capital into Bitcoin due to changes in the macroeconomic and geopolitical environment.