The past weeks saw a string of Bitcoin analysts calling for a bull run towards $16,000, a level that it last tested in January 2017 during a corrective downtrend from its record high near $20,000.
Traders have refused to give up the level ever since. It appears like newfound support that could propel the Bitcoin price further higher. In the short-term, supporting the upside outlook is the uncertainty led by a rising number of coronavirus infections in the US.
CORONAVIRUS IN FOCUS
Meanwhile, a worsening pandemic could fuel up the demand for the second coronavirus relief package. The Federal Reserve’s Chairman Jerome Powell warned in the latest officials meeting that their office could not go ahead with ultra-low interest rates and infinite bond-buying without a stimulus.
An ongoing run-off for two Georgia Senate seats is now the primary focus. Should the Joe Biden-led Democrats win both, their control over Senate would make it easier to pass the second coronavirus package.
Both the fundamental drivers offset one another. That allows investors to stay hedged in assets that have the least correlation with the macroeconomic events.
The cryptocurrency rose incredibly higher against the vaccine news. On the other hand, its top competition gold logged its worst single-day performance in a decade. The cryptocurrency now expects to trade cautiously near $16,000 until further clarity from the US political and economic space.
BITCOIN THIS WEEK
Technically, Bitcoin is at an impasse near $16,156 based on a Fibonacci retracement graph drawn from a swing high of $19,697 to a swing low of $3,153. The coronavirus-induced market uncertainty could have traders sell the local top and target lower levels for re-accumulation.
Holding it, at the same time, would clear the run towards $17,000 or above. But with two offsetting fundamentals and the US presidential election in rearview, Bitcoin has more reasons to wait-and-watch than it has to continue its uptrend towards another yearly high.