21.000$-Bitcoin is possible – this „bullish divergence“ gives hope to traders
Bitcoin could see a sharp upturn as it trades near a confluence of technical support strengthened by external fundamental factors.
The flagship crypto currency appears to be forming an ascending channel formation, confirmed by more than two confirmations of its upper and lower trend lines, which act as resistance and support by Bitcoin Profit platform respectively. Since this Friday, BTC/USD has been testing the support trendline for a possible retracement move.
The Bitcoin price is traded upwards in an ascending channel formation. Source: BTCUSD on TradingView.com
A baseline of another channel formation – a descending one – also converges with the support trend line of the ascending channel. This doubles the strength of the area and protects Bitcoin from further bear attacks.
The tripling of the strength is a visible divergence between the rising volume of the crypto currency and the falling price. This is – technically speaking – bullish.
Nevertheless, Bitcoin risks an extended downward correction below the perceived price floor should more traders decide to secure their profits. Many analysts agree that the crypto currency could fall towards the middle $16,000 – but add that Bitcoin would undergo a major retracement towards its previous high at $20,000.
The formation of the rising channel suggests the same. So far, any attempt by Bitcoin to close below its support trend line has met with strong bull buying pressure. As a result, the price reduces its losses and recovers to the upper trend line of the channel.
Given a fractal reoccurrence, BTC/USD could experience a reversal of the current support trend line towards the channel resistance. This points to another all-time high formation around $21,000.
Massachusetts Mutual Life Insurance Co, a 156 year old financial services company, announced Thursday that it purchased $100 million worth of Bitcoin shares for its general investment account.
The investment looks tiny when compared to what MassMutual already manages (nearly $235 billion in assets). But it does point to the continued growth of Bitcoin.
The price of the crypto currency peaked at around $20,000 at the end of November, after a number of mainstream companies, including MicroStrategy and Square, invested in the currency as a measure against inflation.
Tyler Winklevoss, who together with his twin brother Cameron Winklevoss runs the Gemini crypto currency exchange in the US, estimates that MassMutual’s recent investment ensures that Bitcoin will reach the $500,000 valuation in the future.
„The nature of the investors in this bull run is very diverse. They are super sophisticated institutional investors like the legendary Paul Tudor Jones, [Stanley] Druckenmiller.“
Bitcoin is currently being traded around 11 percent below its record high – a sign of a bearish correction that typically follows parabolic rallies. So far this year, the crypto currency has still risen by about 150 per cent.