Bitcoin has resiliently remained above the $9,000 level of support despite losing a portion of its momentum to the upside.
It has traded within this tight range since the beginning of May, culminating in one of the least volatile periods in Bitcoin’s ten-year history.
Stagnant price action typically precedes a major move, with analysts currently torn over whether Bitcoin will suffer a major correction to the yearly high at $7,100 or break out above the stubborn $10,500 level of resistance.
Bitcoin hasn’t traded above $10,500 since September, 2019, with three subsequent rejections coming in October, February and more recently in May.
A breakout above that level would undoubtedly be the first indicator of a prolonged bullish move to the upside, which would tie into the stock-to-flow model that is attributed to the recent halving event.
As supply of new Bitcoin onto the market is reduced, as long as demand remains the same, price will naturally surge.
However, it’s worth noting that global socio-economic factors such as the impact of covid-19 also poses an issue to the trajectory of Bitcoin over the coming months.
With Bitcoin being closely correlated to the S&P500, a second wave in covid-19 cases could plunge the index as well as the world’s largest cryptocurrency as it did in March.
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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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As with any investment, it pays to do some homework before you part with your money. The prices of cryptocurrencies are volatile and go up and down quickly. This page is not recommending a particular currency or whether you should invest or not.
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice.