Bitcoin psychotically rips to almost US$16,000

Posted: 6 November 2020 6:33 pm

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Bitcoin prices have now solidly topped all previous highs except the biggest.

Bitcoin prices have been rising lately. It is a state that, when it periodically occurs, can be reasonably attributed to there being more buyers than sellers.

The ferocity of this rise is something else though. After months of comparative meandering, Bitcoin chose this week to give a middle finger to gravity and roar on up to a new multi-year high of almost US$16,000.

It took about a month of slow climbing to go from US$10,000 to the top of the US$13,000 range, then Bitcoin went from about US$14,000 to near US$16,000 in around 24 hours flat. It is now definitively the highest it's been since the big heydays of late 2017 and early 2018.

Being the generous coin that it is, rising Bitcoin prices appear to have brought the rest of the market along for the ride, although in the case of Ethereum (pictured in blue alongside Bitcoin below) a lot of that was probably also due to the launch of Ethereum 2.0 phase 0.

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Reason for the breezin'

So, why did Bitcoin fly so spectacularly?

"Prolonged electoral uncertainty against a backdrop of COVID and money printing clearly contributed to Bitcoin's ascent," said Macro Mike, founder and CEO of Big Mike's Macroeconomic Hot Takes Warehouse. "Or maybe it was a reduction in electoral uncertainty. Either way, it was definitely because of something like that, and since there's no way of proving it right or wrong it's as good a theory as any."

Others pointed at the market conditions preceding the rise.

"Bitcoin made clear, high-volume breaks of its historical resistance levels prior to today's massive rise," said freelance analyst Charty McChartface. "We had high expectations for Bitcoin based on it gradually grinding through resistance over the previous month, and it didn't disappoint."

"The air is thin up here. The bulls have broken out of the pen, crossed the road to get a bag of chips and a small Pepsi and now they're happily munching away," he added.

"We've also seen lots of clear, recent interest in cryptocurrencies from institutions like JPM and PayPal, which correlated with previous price jumps, and just generally a lot of buzz around cryptocurrency lately," said a hypothetical entity who hypothetically asked to remain unnamed. "This rise might be driven by a combination of new money gradually entering the space, as well as existing holders repositioning themselves for more Bitcoin exposure in anticipation of even more new money."

It remains to be seen whether Bitcoin can take out its previous all-time highs, but at this rate it looks likely, depending on how able holders are to resist the urge to sell.

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Disclosure: The author owns a range of cryptocurrencies including at the time of writing

Disclaimer: This information should not be interpreted as an endorsement of cryptocurrency or any specific provider, service or offering. It is not a recommendation to trade. Cryptocurrencies are speculative, complex and involve significant risks – they are highly volatile and sensitive to secondary activity. Performance is unpredictable and past performance is no guarantee of future performance. Consider your own circumstances, and obtain your own advice, before relying on this information. You should also verify the nature of any product or service (including its legal status and relevant regulatory requirements) and consult the relevant Regulators' websites before making any decision. Finder, or the author, may have holdings in the cryptocurrencies discussed.

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