Bitcoin prices surged Tuesday, extending their gains from the previous session as investors assessed the ongoing bipartisan efforts concerning the third stimulus package in the United States.
The spot BTC/USD exchange rate climbed 6.31 percent to a new intraday high of $35,649, bringing its week-to-date gains up by a total of 7.58 percent. Meanwhiles, futures contracts tied to the Bitcoin market added as much as 7.76 percent in the ongoing weekly session.
Bids for Bitcoin started surging higher during the European session, where investors/traders focused on improving coronavirus developments concerning vaccine manufacturing and distributions after weeks of disagreement with pharmaceutical firms.
Their confidence in risk-on assets boomed but left an equally denting hole in the Euro demand. The currency fell 0.19 percent against the US dollar. That may have boosted Bitcoin’s demand in the eurozone, given its anti-fiat narrative.
The Next Stimulus
Traders’ focus remained glued across the Atlantic, where the US stock futures rallied on stimulus hopes. A group of Republican senators met US President Joe Biden to discuss their roughly $618 billion coronavirus-relief offer on Monday, including a $1,000 direct payments for many adults.
The proposal omitted many provisions, including aid for state and local governments, that Democrats have put in their $1.9 trillion stimulus deal.
“There is still hope of arriving at something bipartisan,” said Hani Redha, a multi-asset portfolio manager at PineBridge Investments.
“Passing a smaller bill than President Biden’s proposed $1.9 trillion-package along bipartisan lines could be positive for stocks by opening the way to more stimulus spending later in his term, Mr. Redha added.
Bitcoin benefits hugely from stimulus packages. The arrival of the last two relief funds coincides with the cryptocurrency rallying by more than 1,000 percent—and a third one tends to push it higher as excessive dollar liquidity reduces its purchasing power around the globe.
Bitcoin 1-D Chart
From a technical perspective, Bitcoin is looking stronger, as well.
The cryptocurrency now trades inside a Falling Wedge. In retrospect, it is a bullish reversal pattern that forms after an asset trades inside two contracting trendlines. Eventually, it breaks out to the upside by as much as the Wedge’s maximum height.
The price is still trading halfway through the Wedge. Therefore, it may pullback after testing the upper trendline and move towards the lower one. Nevertheless, the technical structure asserts that Bitcoin would break ultimately to the upside. Such a move could push its price to $40,000 or above.