After plunging as low as $17,600 in the middle of last week, Bitcoin has entered an uptrend.
The coin currently trades for $19,200 as of this article’s writing, though moved as high as $19,400 just hours ago. This is the highest Bitcoin has traded in approximately one week.
While some have postulated that Bitcoin may be rallying due to the different market dynamic seen on weekends as opposed to weekdays, there is a growing number of prominent names convinced that this is the true breakout.
Why Bitcoin investors are finally getting convinced of the bull case
Top analysts were bearish heading into last week for good reason: whales had begun to deposit more BTC into exchanges, the U.S. dollar had begun to bounce, there were technical signs calling for a correction, and regulation rumors were rife.
Their fears were proven right as the coin fell from above $19,000 to the lows at $17,600 as aforementioned.
While some of the aforementioned concerns are still valid — namely, crypto regulation is still on its way — these same analysts have had a change of heart as they’ve noticed key trends play out in the Bitcoin market.
One historically accurate trader called “Bitcoin Jack” shared on Sunday morning that with key technical support levels holding as buyers absorb selling pressure, he has begun to buy back into the market:
“Market looking strong, weakness getting absorbed again and again Price is back at where I last ditched my spot and very close to my invalidation levels I’ve bought back my spot exposure because the market keeps buying dips back in to resistance.”
Market looking strong, weakness getting absorbed again and again
Price is back at where I last ditched my spot and very close to my invalidation levels
I’ve bought back my spot exposure because the market keeps buying dips back in to resistance
— //Bitcoin 𝕵ack 🐐 (@BTC_JackSparrow) December 13, 2020
“Bitcoin Jack” is regarded to be one of the best traders on Twitter, having called the March 2020 bottom, the subsequent V-shaped reversal to $10,000, then the latest leg up past $18,000 and beyond far before any of these events happened.
The fundamentals are also strong for Bitcoin.
Matt Kaye, a managing partner at BlockHead Capital, noted on Saturday that per his “rough, back of the napkin” math, there is at least $820 million worth of Bitcoin that will be purchased “between here and at least $20k.”
This is rough, back of the napkin, don't trust me, Saturday night musing…
IMO we have ~$820MM of identifiable buying pressure between here and at least $20k (~43k btc to be purchased).
Explain to me how this is not the beginning of new highs?
Again, super rough math…
— Matt 🧐 (@matt_chain) December 13, 2020
Kaye is likely referencing the news about MicroStrategy, MassMutual, and other institutional and corporate players that are buying Bitcoin to add to their balance sheet.
To highlight MicroStrategy in particular, the company raised $650 million last week in a private debt offering. The company seeks to purchase BTC and BTC alone with that capital.