Bitcoin’s price has rallied bullishly these past few days, touching $55,000 and retracing shortly after. For the moment it has managed to keep most of its gains.
Analysts have turned to the influx of major institutional investors as an explanation for Bitcoin’s price gains. Recently, Meitu – the Chinese tech company that has established an application geared towards beauty and image editing – announced that it too has joined large-scale financial institutions in backing Bitcoin. The software firm purchased $22.1 million worth of Ethereum (ETH) and $17.9 million worth of Bitcoin (BTC). Paolo Ardoino, CTO at Bitfinex, shared with Blockchain.news:
“Meitu’s purchase of Bitcoin and Ethereum could see more businesses in Asia joining the likes of Tesla and MicroStrategy in adding cryptocurrencies to their balance sheets. This may signal the maturing of crypto in Asia and spark further retail interest across the region.”
He added that in addition to this, Meitu embracing blockchain technology could lead to a boost in cryptocurrency adoption in Asia. Ardoino said:
“Meitu’s plan to integrate blockchain technology into their businesses could lead to even more innovation in crypto and ultimately boost mass adoption in Asia, especially within the region’s emerging markets.”
Bitcoin’s recent market capitalization recently crossed $1 trillion once again. This illustrates a growing demand from institutional investors, as more major companies have been allocating a portion of their balance sheet to Bitcoin.
With the rise in interest in Bitcoin and cryptocurrencies, what is to be expected of the safe-haven asset in the upcoming days?
Bitcoin (BTC) Price Analysis
Source: BTC/USD 4-Hour via TradingView
Bitcoin (BTC) soared higher, reaching $55,855 earlier today. At the time of writing, the price of BTC has pulled back and is trading at $53,522. Currently, the bulls are trying their best to defend the critical level of $54,000.
Bitcoin is currently trading at a price well above $52,000 and the 20-day Exponential Moving Average of $52,145.
If BTC/USD continues to maintain its upward momentum and bulls are able to maintain the price above $54,000, traders will focus on the first upward price target of $56,000. Any further increase may likely result in the price being pushed past the resistance level of $58,000, Bitcoin’s all-time high.
From the four-hour candlestick graph, we can see that Bitcoin rose above the $50,000 resistance zone yesterday. The digital asset touched $52,000, successfully breaking through the neckline of the inverse head and shoulder pattern illustrated above. The neckline is $52,079.
What investors should be aware of is that the breakthrough of the inverted head and shoulders pattern is not always smooth. Generally speaking, it will take more time for digital assets to break through the right shoulder. Successful breakthroughs of the neckline area will also always be accompanied by a rapid increase in trading volume.
However, when looking at Bitcoin, there is no notable increase in trading volume happening at the moment. BTC/USD currency pair may undergo a price correction and retest the previous resistance level of $52,078.
When looking at technical indicators, we can see that the moving average convergence divergence (MACD) line is gaining momentum, indicating that BTC is still in the bullish zone.
So despite the likelihood of a retracement for Bitcoin, the digital asset will likely still uphold above $52,000, which is its current support level.