Bitcoin, the largest cryptocurrency in the world by market capitalization currently valued at $2.11 trillion, continues its upward trajectory, hitting a record high of $107,821 yesterday, and is currently trading near $107,000. The price of Bitcoin has risen by approximately 58% since the close of the November 4th session, just before the U.S. elections, when it was at $67,818, reaching current levels.
Bitcoin has also risen by about 153% since the beginning of the year, outperforming the Nasdaq 100 index (which rose about 33%), the S&P 500 index (which rose about 28%), and gold (which rose about 29%).
It is worth noting that Bitcoin ranks sixth among the largest financial assets by market capitalization, after Apple ($3.79 trillion), Microsoft ($3.36 trillion), Nvidia ($3.23 trillion), Amazon ($2.45 trillion), and Alphabet ($2.42 trillion).
Factors that have supported Bitcoin’s prices include, but are not limited to:
- Trump’s comments suggesting he intends to establish a U.S. strategic reserve for Bitcoin.
- A 75 basis point U.S. interest rate cut this year, with further cuts expected in the coming period. For example, markets expect a 25 basis point rate cut in December 2024, and next year, a 75 basis point cut, which could positively affect cryptocurrencies, particularly Bitcoin priced in U.S. dollars.
- Optimism surrounding a more flexible environment boosting market sentiment, especially after the announcement of MicroStrategy – the world’s largest corporate Bitcoin holder – joining the Nasdaq 100, which could enhance its ability to attract additional investments to purchase more Bitcoin.
- Fear of missing out (FOMO).
- Increased risk appetite among investors, especially large institutions, who are adding Bitcoin to their portfolios for diversification and due to strong optimism towards the industry.
From a technical perspective, indicators suggest that Bitcoin’s price rise will continue for the following reasons:
- The alignment of the 20-day, 50-day, and 200-day moving averages in an upward direction, with the 20-day moving average surpassing the 50-day moving average, and the 50-day moving average exceeding the 200-day moving average.
- The Relative Strength Index (RSI) currently stands at 70, indicating Bitcoin’s bullish momentum.
- The Positive Directional Index (DMI+) stands at about 30, compared to the Negative Directional Index (DMI-) at around 9. The significant gap between these two indicators shows strong buying pressure on Bitcoin. Most importantly, the Average Directional Index (ADX) stands at about 42, indicating strong momentum in this upward trend.
- The bullish crossover between MACD (blue) and Signal Line (orange) in the positive zone, signaling continued bullish momentum for Bitcoin.
The biggest challenge for Bitcoin is reaching the $150,000 level, and then the $200,000 level.
Please note that this analysis is provided for informational purposes only and should not be considered as investment advice. All trading involves risk.
