Bitcoin price reached $18,000. Will the rally continue?

Reasons for Bitcoin growth

Paypal allows the buying and selling of cryptocurrencies

The largest international payment system added cryptocurrency support for authenticated US citizens to its arsenal, later in 2021 users from other countries will be able to buy and sell cryptocurrency. At the beginning, the payment system will allow people to buy and sell Bitcoin (BTC), Ethereum (ETH), Bitcoin Cash (BCH) and Litecoin (LTC), as well as store them in the integrated wallet.

Quiet haven

The coronavirus pandemic has hit the Chinese economy and then the entire world, resulting in a drop in production, the death of the tourism industry and a huge unemployment rate. For example, Dow Jones Index was down 20,3%, while the NASDAQ fell 30%.

Billionaires are going to crypto

“Some hedge fund investors are shedding their wariness of bitcoin as it continues to soar. Stanley Druckenmiller, who built his $4.4 billion fortune as the head of Duquesne Capital Management and claimed in 2018 he “didn’t want to own bitcoin,” revealed on CNBC that he did buy some bitcoin and thinks it could perform better than gold, though he still holds more of the precious metal. Also, Druckenmiller said that he bets against the US Dollar.” — Forbes

A year after halving

Bitcoin halving is an event when the reward for mining one block is cut in half, it happens every 4 years in order to control the inflation of coins. The first halving on the network happened in November 2012, then miners began to receive 25 bitcoins instead of 50 for the mining of a block. At that time, the digital currency fluctuated around $12, but within a year the price jumped to $260. The next halving took place in 2016 when the coin was traded at a price of $600, and after 12 months the price reached $2,600.

Can Bitcoin keep its insane growth? Let’s figure it out

The share of Bitcoin HODLers has reached a historic high

The share of wallet holders (those who have not sold their bitcoins in recent years) has reached a historic high of 44%. Again, as in previous halvings, this demand-side pressure will push prices upward and could be a catalyst for another explosive growth.

The next waves of COVID-19

To begin with, let’s recall the seemingly distant start of the COVID pandemic again. The pandemic shocked the global world and plunged many countries into a recession comparable to the Great Depression and the mortgage crisis of 2008 in the United States, which entailed a crisis around the world, from the consequences of which not everyone has recovered.

US Presidential Election

Joseph Biden unofficially became the new President of the United States of America. We are faced with the question of what measures the representative of the Democratic Party will take in relation to the decentralized currency. So far, the potential 46th president has no official position on Bitcoin, however, the Biden presidency could lead to more regulation of cryptocurrency, reversing Trump’s mostly hands-off approach.

Technical analysis

Technical analysis on the daily chart is showing signs of weakness. The RSI index (the relative strength index is a momentum indicator used in technical analysis that measures the magnitude of recent price changes to evaluate overbought or oversold conditions in the price of a stock or other asset) shows that a short-term bearish divergence.

Conclusion

Based on the foregoing, we believe in the long-term success of Bitcoin, but there are chances that the BTC price will undergo a slight correction, so we advise you to evaluate the current market situation and diversify risks.

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