Bitcoin Analysis: The Leading Cryptocurrency is Trading Below $100k

Bitcoin Analysis: The Leading Cryptocurrency is Trading Below $100k

• The maximum price of Bitcoin has reached approximately $103,000.
• Its market capitalization has increased from 1.3 trillion USD to over 2 trillion USD since the elections.
• The correlation with the S&P 500 remains close to 82%, suggesting that Bitcoin's price movements are likely to follow similar behavior as the broader stock market in the near term.

The leader of cryptocurrencies continues to be one of the most popular assets in the market, thanks to a price increase of over 40% in the past month, driven by investor confidence following the elections. Currently, Bitcoin’s maximum price is in the $103,000 range, consolidating its position as one of the fastest-growing assets in the cryptocurrency sector.

The Effect of the Presidential Elections

The reelection of Donald Trump had an immediate impact on the cryptocurrency market, triggering a significant bullish trend. During his campaign, Trump repeatedly expressed his intention to reduce regulatory burdens on the crypto market, positioning the United States as a favorable environment for the exchange of virtual currencies. Furthermore, he has nominated Paul Atkins, a well-known crypto advocate, as chairman of the Securities and Exchange Commission (SEC). This appointment could lead to changes in some restrictive aspects of current regulations.

Since the election on November 5, Bitcoin's market capitalization has increased from approximately 1.3 trillion USD to over 2 trillion USD, representing a growth of about 50%. This surge, unseen for over a year, could signify a major shift in the general perspective of the cryptocurrency market.

Market Capitalization Growth BTC ($)

Source: Coinmarketcap.com

Additionally, not only has Bitcoin’s market capitalization increased, but other assets like Ethereum have also shown consistent growth of over 50% during last month. This behavior highlights the growing interest from investors in the cryptocurrency market.

Market Capitalization Growth BTC and ETH (%)

Source: Coinmarketcap.com

How Did the ETF Perform?

Since BlackRock’s push to formalize a Bitcoin ETF, market acceptance has been remarkable. There are even comments of creating similar securities for other cryptocurrencies like Ether and Ripple. Currently, BlackRock’s iShares Bitcoin Trust (IBIT) has, for the first time, reached $50 billion in assets under management, reflecting the growing interest of institutional investors in the regulated Bitcoin market. This has contributed to maintaining market confidence during the holiday season.

Correlation Cannot Be Ignored

Since the onset of the Covid-19 pandemic, Bitcoin has shown increasing correlation with traditional markets. Currently, its correlation with the S&P 500 is at 82%, indicating that positive movements in the index are comparable to Bitcoin’s price movements.

The primary cause of this phenomenon has been the optimism prevailing in the markets after the elections, which has driven capital toward higher-risk markets, reducing activity in fixed-income markets. However, this dependence on confidence in traditional markets could pose a long-term risk, as any loss of confidence in the indexes could also impact Bitcoin to some extent. Remember there is no guarantee that this correlation will continue in the future.

Source: Theblock.co – Data: Cryptocompare, Yahoo finance

Bitcoin Technical Forecast

Bitcoin has experienced a surprising bullish trend in recent sessions, reaching $100,000 per BTC for the first time. However, all key resistance zones have been surpassed, and the price maintains a constant upward acceleration, which could alert to short-term corrections.

Source: Tradingview.com

• Accelerated Trend: Since September, Bitcoin’s price started a stable upward trend around $56,800. However, in November, this trend became significantly steeper, showing faster-than-expected price growth. In this context, it is important to monitor movements around the key resistance zone at $100k, as such rapid price increases may lead to bearish corrections.
• Overbought Indicators: The RSI is currently oscillating above 70, indicating an overbought level and a significant imbalance between buying and selling pressures. Additionally, the CCI shows consistently elevated levels above 100, warning of a potential excess in buying strength that may moderate in the short term.
• Key levels:
  • $100k: A psychological barrier that has become the new key resistance zone in price movements. Breaks above this level could signal stronger buying momentum.
  • $92,300: The current support level on the chart, where corrections may stabilize.
  • $73,000: A critical floor; movements near this level could endanger the bullish trend.

Bitcoin continues to exhibit a strong upward trend, driven by recent political events that have boosted market confidence. However, its ability to sustain strong movements above the $100k zone will be crucial for maintaining confidence in the long-term trend.