Bitcoin is on the move – is 30K next?

Bitcoin has started the week in positive territory, with gains of 3.0%. Currently, bitcoin is trading at USD27,043.

Bitcoin punches past USD 29,000

The enthusiasm for bitcoin continued on the weekend, as the crypto punched above the USD 28,000 for the first time. Bitcoin followed gold and moved higher after President Trump signed the stimulus/spending bill that Congress has laboured over for months. Last week, Trump threw a monkey wrench in the process by threatening to veto the bill unless Congress raised the amount of stimulus checks. However, Trump backed down and signed the bill, raising risk sentiment and sending bitcoin to record-high levels.

It’s been a remarkable year for bitcoin, which has rocketed some 260% since the start of 2020. It is hard not to be bullish about the crypto, but the extreme volatility which marks bitcoin means that a correction could be rapid and painful. Still, for those traders and investors who have the stomach for a financial roller-coaster, the USD30,000 level certainly appears within reach.

Bitcoin has been moving in inverse relation to the US dollar in recent months, and there has even been talk that it could become a “mainstream financial asset” which would replace the US dollar. However, the notion that the US  currency will be replaced as the global reserve currency appears to be wishful thinking. Although the status of the greenback as the global reserve currency has been eroded in recent years, central banks around the world hold trillions of dollars worth of US government bonds in additions to US dollars. It is true that bitcoin has made spectacular gains in 2020, but this trend could turn around in a hurry, as “what goes up can go down”, especially in the case of cryptos.

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BTC/USD Technical

• BTC/USD faces resistance just above the 30,000 level.
• 28,354 is providing support. The next support line is at 25,421
• The pair continues to move away from the 10-day MA

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