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Bitcoin has been skyrocketing over the past few days, and the number one cryptocurrency is currently trading for about $12,965 at the time of writing, the highest it’s been all year.
Bitcoin Is Getting Stronger in Certain Regions
According to one source, however, the currency has already crossed the $13,000 threshold in several other countries including Brazil, Turkey and Argentina. What’s interesting is that at press time, these countries’ native fiat currencies have been experiencing heavy inflation, which explains why bitcoin is suddenly reaching new pinnacles within their borders.
As time has gone by, more and more individuals are seeing bitcoin as a potential tool for hedging one’s wealth against economic strife and harsh monetary conditions. The coronavirus pandemic has brought about heavy inflation to even some of the most established fiat currencies such as the US dollar. As a result, many are beginning to view bitcoin under a stronger lens and feel it is the only stable asset when compared with stocks and cash.
Bitcoin first began to rise earlier this week after it was announced that users of PayPal would be able to purchase cryptocurrencies through the platform. In addition, they would be permitted to utilize crypto for the purchasing of goods and services.
Furthermore, additional talks regarding the upcoming round of stimulus checks have also pushed bitcoin into higher territory. Despite all the positive news, however, many analysts are predicting that bitcoin is likely to suffer something of a pullback in the coming days or weeks thanks to what they’re referring to as typical behavior amongst traders and investors.
Whenever bitcoin manages to reach a new pinnacle and these individuals make some money, the first instinct a bunch of them seem to have is to sell some of their bitcoin stashes and rake in part of the profits. As it stands, bitcoin is nearly $3,000 higher than where it stood in early September, meaning it’s gained quite a bit of ground in just over a month.
Will the Asset Suffer a Bit?
Now that BTC is trading at a whole new level, they warn that several bitcoin holders out there are likely to sell off some of their money and collect a little dough in the process. This will ultimately cause the asset to lose some of its stamina, and we may see the price drop a bit before the bulls continue to make their moves.
Furthermore, certain technical indicators are there to suggest that perhaps the rally is outdoing itself. The 14-day Relative Strength Index exists to tell whether BTC has been either overbought or oversold in recent days. Not long ago, the RSI for bitcoin jumped well beyond 80 and remained in this position through Friday. Values are also above 70, suggesting that the asset is due for a reversal and that it may have been overbought during the past few weeks.