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  • Bitcoin gained over 18% in a single week and hit a new high of 2020.
  • The coin may speed up to $12,00 after a short-lived correction.

Bitcoin has had its best week since mid-2019. The first digital currency gained over 18% in a single week and hit the new highest level of 2020. At the time of writing, BTC/USD is changing hands at $11,358 and the upside momentum is gaining traction as Bitcoin bulls are pushing at the upper line of the weekly Bollinger Band. 

Bitcoin’s on-chain stats improved significantly as the price resumed the recovery after a short-loved consolidation at a pivotal $11,000.  The high sense of uncertainty gave way to cautious optimism with nearly 94% of Bitcoin addresses in a green zone against 82% registered a week ago. The number of large transactions stalled at 15,000, while its average volume decreased form 1.1 million BTC registered on July 28 to 896k BTC. The 30-day volatility stayed flat at 31.8%.

Bitcoin’s fundamental factors

Bitcoin has been moving in sync with Gold as a safe-haven asset amid heightened fears about the second wave of COVID-19 and dire economic conditions. Investors have been an anti-inflationary seeking shelter for their assets and flocked to both physical and digital gold. As the economic recovery is at risk, many global central banks stand ready to offer new monetary and fiscal stimulus to keep the economy and the financial system afloat. These measures make assets like gold, porperty, collectibles, etc more attractive. Bitcoin is one of such assets, according to Nick Cowan, CEO of the Global Stock Exchange (GSX) Group.

The Covid-19 pandemic has led to government intervention globally. In the medium term, this will no doubt result in tax rises and possible assets being charged, therefore there is interest in assets that offer transferability without being taxed i.e. art, cars, gold, wine, and BTC are all becoming of interest — a trend I expect to continue… I see BTC the same way as I see gold. It’s an alternative but you can’t use it in shops. Digital fiat is the future, he said in a written comment to the FXStreet. 

BTC/USD: Technical picture

On a weekly chart, Bitcoin (BTC) has printed the biggest green candle since mid-2019, which is a positive signal in the long run. Moreover, the price is making attempts to settle above the upper line of the weekly Bollinger Band. Once it happens, the upside momentum will start snowballing towards the recent high of $11,414 and psychological $12,000. 

The local support is created by $11,000 as the price has been consolidating around this area for the most part of the week. It may slow down the correction; however, once it is broken, $10,000 will come into view. This area is regarded as a new foundation that will be defended by BTC buyers. If it gives way, the sell-off pressure will increase. The next important barrier is created by weekly SMA50 currently at $8,600, which coincides with the middle line of the weekly Bollinger Band.

Considering the upward-looking RSI on the long-term charts, the bullish scenario looks likely at this stage.

BTC/USD weekly chart

The daily chart confirms the positive market sentiments; however, the price moved out outside the daily Bollinger Band, which means it may be vulnerable to the short-term correction. The initial correction target comes at $11,000, which is reinforced by the intraday low. The next local support is created by $10,800 and $10,500. Both levels limited BTC recovery during the previous week. 

BTC/USD daily chart

The Forecast Poll has worsened since the previous week as expectations on all timeframes are bearish now. The market sentiments has changed even though the price increased significantly. Notably, the price expectations moved above $10,000 on both monthly and quarterly  forecasts, though at this stage the experts seem to bet on the short-term price increase within the long-term consolidation trend.