Bitcoin has begun to trade above $16,000 for the first time since early 2018 today, reinforcing the bullish narrative that is currently circulating.
It’s devastating rally from $10,000 to $16,000 has caught many by surprise given the relative lack of retail interest in the asset class.
eToro analyst Simon Peters believes Bitcoin will likely test higher prices before the year is over, with a price target emerging at $17,500.
“Bitcoin has touched $16,000 today, another major milestone in an already very impressive rally, and we may well see even higher prices before the year is out.” He said.
“Prices are moving in what’s technically considered an ‘upward continuation pattern’. More often than not, that means that prices will then break out of the pattern in the direction of the prevailing trend.
“If we see a strong bullish breakout from the pattern, then there is no reason we can’t see the next price threshold set at $17,500. That would take us to bitcoin’s previous resistance level from January 2018, when prices failed to push any higher after a major drop from the all-time high of $20,000.”
Bitcoin’s recent rally coincided with the US presidential election and subsequent surge in the S&P500.
Peters believes that now the US election is over, attention will return to the proposed fiscal stimulus package.
He added: “Even with the prospect of a Covid-19 vaccine, the US economy will still need support to assist it through the period before it is made available to people. The size of the package and the mechanics behind its funding could be the catalyst to finally take us past $17,500.”
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Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.