Bitcoin made further record highs in its first official week of trading of the year, raising hopes that it would continue to climb 302 percent after closing the previous year.
The benchmark cryptocurrency opened on Wednesday with a wild upward movement. It hit a new all-time high of $ 35,868 before the opening bell in London. The gains appeared as part of a retracement rally that began when BTC / USD plummeted from its previous record high of $ 34,810 to $ 27,678, suggesting incredible support for the pair despite overbought sentiment.
Bitcoin corrects down after hitting new highs of over $ 35,000. Source: BTCUSD on TradingView.com
That dollar feeling
Bitcoin’s gains have also surfaced over the past 24 hours as the US dollar continued to slide in its 10-month downtrend. On Wednesday, the US dollar index hit its lowest level since April 2018 at 89.275. According to Reuters, investors reduced their greenback bids while they waited for the result of a Senate runoff in Georgia.
US dollar index hits a two-year low due to falling demand. Source: DXY on TradingView.com
The Democrats will take control of the Senate House if they win both seats in Georgia. This would allow President-elect Joe Biden’s administration to pass additional stimulus measures, including the previously proposed $ 2,000 check for Americans, without encountering political opposition from either house.
Sentiment has prevented an oversold US dollar from rebounding. Meanwhile, Bitcoin is venturing further into the overbought territory due to its negative correlation with the greenback. The same thing was noted by independent market analyst Alex Krúger in his note on Tuesday.
“Rising Dem quotas have propelled assets from Bitcoin to the dollar to returns since November, all expressing the same macro trade with their own specifics,” he said.
Fundamental boost for Bitcoin
Bitcoin’s $ 35,000 explosion is also due to an institutional investment history.
On Monday, JPMorgan strategists said in a note that BTC / USD could climb to $ 146,000 by the end of 2021 as it competes with gold for the best safe-haven status. A day later, Skybridge Capital launched a cryptocentric fund with an investment of $ 40 million. The hedge fund’s founder, Anthony Scaramucci, called Bitcoin better than gold.
“It’s easier to store, it’s harder to steal, and it’s more portable,” he told Bloomberg. “Hence, it is the ledger or future safekeeping in terms of store of value.”
The fund would allow accredited investors to get exposure to the Bitcoin market with a minimum investment of $ 50,000. Fidelity will serve as their main stakeholder.
Ki-Young Ju, CEO of South Korea-based blockchain analytics firm CryptoQuant, stated that institutional exposure to the bitcoin market has increased even though the price was over $ 30,000. That indicated preparations for a long-term build with short-term goals in excess of $ 60,000.
“The BTC bull market is not over yet,” said Mr Ju.