Bitcoin is looking to make another attempt at closing above $20,000, at least according to many traders familiar with the cryptocurrency’s intraday volatile moves.
A flurry of pseudonymous and identifiable market analysts, including TraderXO, the Crypto Monk, and Nico, has predicted that Bitcoin would form an all-time high in the coming daily sessions.
Almost everyone notes that the cryptocurrency is on the cusp of breaking above a resistance target/area/level, following which a bull run towards the $20,000-level is the most likely outcome.
For Nico, that pattern is a Bull Flag, a bullish continuation structure that forms during an uptrend. The prominent daytrader noted that Bitcoin would hit a record peak once it forms a higher high above $19,400.
“Looking good for bulls now,” he added alongside the chart as listed below.
Meanwhile, TraderXO makes his bullish case based on fractal levels. He noted that the BTC/USD exchange rate is eyeing two resistance levels: a pre-weekly open and a monthly open. Both levels had served as resistances between late-November and the present.
The Crypto Monk, meanwhile, expects a “great liftoff” as long as Bitcoin maintains support above $18,600.
FOMC December Meeting
The bullish outlook also appears as the cryptocurrency investors prepare for the year’s final Federal Reserve policy meeting on December 15-16.
Many analysts believe that the US central bank will steer clear of more stimulus but still ramp up its dovish sentiment. Doing so would maintain its benchmark interest rates near zero while keeping the pace of its bond purchasing intact.
“The Fed,” SAID analysts at ING, “will leave the Fed funds target rate at 0-0.25% next Wednesday, promising to keep it there until the goal of maximum employment and inflation being “on track to moderately exceed 2% for some time” is met – their “dot” diagram will continue to suggest this won’t happen before 2023.”
Bitcoin as Hedge
Investors and traders bought Bitcoin as a hedge against their fears of inflation, resulting in a massive, 400 percent price rally towards the cryptocurrency’s new all-time high at $19,915 (data from Coinbase). Therefore, a dovish Fed could pave the way for Bitcoin to reach new upper price levels.
Further support comes from a bipartisan effort from Capitol Hill to introduce and pass a $908 billion COVID-19 relief bill. That, in turn, would introduce excess US dollar liquidity into the system, eventually leading to the greenback’s devaluation against a basket of foreign currencies.
It further attests to the theory that Bitcoin could hit $20,000 by the end of this week.