Bitcoin is astonishingly consolidating above the $46,000 level following a remarkable break-out that saw it reach an all-time high of $48,000 on Monday.
The rally was spurred by news that car manufacturer Tesla had purchased $1.5 billion in Bitcoin and that it would soon accept the cryptocurrency as a means of payment.
Whilst there was previously signs that the bull market was winding to a close, Monday’s news is potentially a fundamental game changer for Bitcoin as it could increase adoption among large global companies.
RBC Capital markets suggested that Apple may be the next company to put Bitcoin on its balance sheet, although it’s worth noting that nothing has been confirmed.
From a technical perspective, Bitcoin will likely come back to test its prior all-time high of $41,000 before experiencing a period of continuation to the upside.
Conservative price targets to the upside remain at $50,000, as this is a key psychological number, and $64,000 as this is a very active strike price on Bitcoin options exchanges.
However, there has been concerns over the validity of this recent rally, with it being compared to the Wall Street Bets mania that saw Gamestop surge from below $20 to more than $400 in a matter of days.
A rejection from here to below $40,000 would initiate a catastrophic bull trap, which would trap those in leveraged long positions, causing more pressure to the downside.
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In August 2008, the domain name bitcoin.org was registered. On 31st October 2008, a paper was published called “Bitcoin: A Peer-to-Peer Electronic Cash System”. This was authored by Satoshi Nakamoto, the inventor of Bitcoin. To date, no one knows who this person, or people, are.
The paper outlined a method of using a P2P network for electronic transactions without “relying on trust”. On January 3 2009, the Bitcoin network came into existence. Nakamoto mined block number “0” (or the “genesis block”), which had a reward of 50 Bitcoins.
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Disclaimer: The views and opinions expressed by the author should not be considered as financial advice.