Bitcoin analysis: Major cryptocurrencies are trading below $100,000
Bitcoin's peak price reached around $103,000.
After the election, the company's market capitalization increased from $1.3 trillion to more than $2 trillion.
Its correlation with the S&P 500 remains close to 82%, suggesting that in the short term Bitcoin's price movements are likely to follow similar movements to the broader stock market.
The cryptocurrency leader remains one of the most popular assets on the market, thanks to a price increase of more than 40% in the last month driven by investor confidence following the election. Currently, Bitcoin's peak price is in the $103,000 range, reinforcing its position as one of the fastest growing assets in the crypto sector.
Impact of presidential election
Donald Trump’s re-election had an immediate impact on the cryptocurrency market, sparking a significant bullish trend. During his campaign, Mr. Trump positioned the United States as a favorable environment for crypto exchanges and reiterated his intention to reduce the regulatory burden on the crypto market. Additionally, he nominated Paul Atkins, a prominent cryptocurrency advocate, to head the Securities and Exchange Commission (SEC). This appointment is likely to result in changes to some restrictive aspects of current regulations.
Since the November 5 election, Bitcoin's market capitalization has increased from about $1.3 trillion to more than $2 trillion, representing a growth of about 50%. The surge, which hasn't been seen in over a year, could mean a major shift in the overall view of the crypto market.
Market capitalization growth rate BTC ($)
Source: Coinmarketcap.com
Moreover, not only has Bitcoin's market capitalization increased, but other assets such as Ethereum have also shown consistent growth of over 50% in the last month. This action highlights the growing interest of investors in the crypto market.
Market capitalization growth rate BTC and ETH (%)
Source: Coinmarketcap.com
How did the ETF perform?
Since BlackRock pushed to formalize Bitcoin ETFs, market acceptance has been impressive. There are even comments about creating similar securities for other cryptocurrencies such as Ether and Ripple. BlackRock's iShares Bitcoin Trust (IBIT) now has assets under management of $50 billion for the first time, reflecting growing institutional investor interest in the regulated Bitcoin market. This helped maintain market confidence during the holiday season.
Correlation cannot be ignored
Since the start of the coronavirus disease (Covid-19) pandemic, Bitcoin has shown increased correlation with traditional markets. The correlation with the S&P 500 is currently 82%, indicating that positive movements in the index are comparable to movements in Bitcoin's price.
The main reason for this phenomenon is that the optimism that prevailed in the market after the election directed capital towards riskier markets and reduced bond market activity. However, reliance on traditional market confidence may pose long-term risks, as a loss of confidence in the index may also have some impact on Bitcoin. Please note that there is no guarantee that this correlation will continue in the future.
Source: Theblock.co – Data: Cryptocompare, Yahoo Finance
Bitcoin technical predictions
Bitcoin experienced a surprising bullish trend in recent sessions, reaching $100,000 per BTC for the first time. However, all major resistance zones have been broken out and prices maintain a certain upward acceleration, which could warn of a short-term correction.
Source: Tradingview.com
Accelerating trends: Since September, Bitcoin price started a steady upward trend around $56,800. However, this trend became noticeably steeper in November, with prices rising faster than expected. In this context, it is important to monitor movements around the key resistance zone of $100,000, as such a sharp price increase could lead to a bearish correction.
Overbought indicator: The RSI is currently hovering above 70, indicating overbought levels and a large imbalance between buying and selling pressure. Additionally, the CCI has consistently shown rising levels above 100, warning of a potential excess in purchasing power that may ease in the short term.
Main level:
$100,000: Psychological barriers have become the new major resistance zone in price movements. Above this level, buying momentum is likely to increase.
$92,300: The current support level on the chart where the correction may stabilize.
$73,000: critical floor. Any movement near this level could put the bullish trend in jeopardy.
Bitcoin continues to show a strong upward trend, driven by recent political events that have boosted market confidence. However, the ability to sustain a strong move above the $100,000 zone is important to maintain confidence in the long-term trend.
