Bitcoin (BTC) starts a new week at the high end of its new price range near $ 12,000 – will the market finally crack this week?
Cointelegraph takes a look at five things to consider when setting the trend for Bitcoin in the days ahead.
The S&P 500 is approaching all-time highs again
In contrast to the previous weeks, the macro markets and their influence on Bitcoin were again in the spotlight on Monday.
China leads the way as its stocks rose near their two-year highs when it was revealed that the People’s Bank of China (PBoC) is planning to ease monetary policy.
The Shanghai Composite Index rose 2.3% that day, with the year-to-date increase being 13% despite the coronavirus disruption.
Elsewhere, the S&P 500 is already up over 50% from its March lows, with Goldman Sachs analysts revising their year-end forecasts for the increase. The goal is now 3,600 points, not 3,000 – a new record.
At the time of writing, the index was just 14 points away from its all-time high in February before the coronavirus outbreak.
“As the past few months have shown, share prices depend not only on expected future income flow, but also on the rate at which these dividends are discounted to their present value,” Bloomberg quoted Goldman’s David Costin in a note Friday.
“Looking ahead, the lower equity risk premium will outweigh the rise in bond yields and, along with our expectations beating the EPS consensus, will bring the S&P 500 index to 3,600 by the end of the year.”
Stocks previously had a huge impact on Bitcoin, with the S&P 500 correlation already at 95%. As Cointelegraph reported, despite gold’s dominance in recent weeks, analysts still believe that a drastic change in stocks will also be reflected in Bitcoin, given the recent high correlation.
Bitcoin’s relationship with gold has slumped since the latter lost its $ 2,000 support level – from 68% to 48% in August, according to data.
Analyst: $ 12,000 could cause Bitcoin to fall
Market sentiment is facing its own hurdle within Bitcoin.
$ 12,000, a value that has been repeated multiple times over the past two weeks but has not been endorsed, continues to cause problems for traders. The recent price move confirmed the fact that $ 12,000 doesn’t have the appeal to crack as resistance.
“We’re still in a bullish trend so I’ll have to stop on the bullish side,” Cointelegraph Analyst Markets told filbfilb on August 13 on its Telegram channel. He also looks at the upward move in altcoins as BTC price remains sideways, a bullish sign, especially after “price moves showed a significant spike in demand,” he explained. “Too many wicks.”
During the weekend, analyst Michael Van de Pope suggested that the $ 12,000 disharmony was strong enough to cause a stronger rebound in BTC / USD. He said the $ 10,500 support was “very likely” to rise before strength appeared to rise higher and eventually flipped the $ 12,000 support.
“Given the importance of this level, I began to believe that this would be a very likely scenario,” Van de Pope told Twitter followers.
“However, the clear breakout and turnover of $ 12 thousand is a continuation of about $ 13 thousand and maybe $ 15 to 17 thousand.”
Bitcoin returned to trading within a corridor in August after securing surprising moves between $ 10,500 and $ 11,000 in resistance that surprised market participants with its speed and durability.
Over $ 12,000 once set aside, little stands in the way of BTC / USD in terms of resistance to the area around its all-time high of $ 20,000 as of 2017.
The high hash rate ever precedes the difficulty level
Price features aside, Bitcoin is stronger under the hood than ever.
On Monday, the Bitcoin network’s hash rate was at an all-time high of 129 hours per second (EH / s).
The hash rate refers to all of the computing power miners put into blockchain validation and transaction processing.
The metric is an estimate, not a fixed metric, with an all-time high of an average hash rate of seven days.
The miner’s behavior changes and affects the rating so that the hash rate fluctuates. Last week there were further concerns after a mining pool suddenly sent out 800 BTC to exchange from Binance – likely before the sale.