Strengthened last week at 6% on the back of rising gold and stock indices.
On Saturday, the first cryptocurrency broke through to the $11,500 level, but failed to take it. Shortly before that, Square announced an investment of $50 million in bitcoin.
"Here, we can rather talk about the psychological effect rather than the size of purchases. The crypto-community reacts extremely positively to events that are related to investments of companies from the traditional sector in cryptocurrencies," notes the FxPro team of analysts.
Despite the periodic , in the long term bitcoin is still set to renew the highs. The positive trend is supported by several factors at once, coinspot writes.
The first factor that strengthens BTC is the reduction of bitcoins on exchanges. Investors prefer not to sell coins at current prices and wait for cryptocurrency growth. This strategy creates conditions for the resumption of the BTC rally, according to Coin Metrics.
The second positive factor is the growth of the Bitcoin MVRV indicator, which tracks the return on investment in the cryptocurrency. This indicator is now following the same trajectory as in 2016-2017.
The third positive factor is the continued growth in the number of large cryptocurrency holders or so-called "whales". They become active during periods of heightened volatility. First of all, this applies to the moments of bitcoin's fall.
Growing network activity is also a positive signal. The BTC network now processes more than 300,000 transactions per day. CoinMetrics expects more robust bitcoin growth in 2021.
Meanwhile, BTC will benefit from the election of Joe Biden as U.S. president, according to Bloomberg.
If a new team comes to the White House, the policies towards the cryptocurrency industry will be relaxed and the likelihood of bitcoin-ETF approval will increase.
But hard times are coming for the DeFi decentralized finance market. The new administration will start introducing crypto-regulation, which will lead to a cleanup of the DeFi space and the liquidation of many projects.
Bloomberg found many similarities between the current situation and the market environment in 2016. Four years ago, the halving and the US presidential election also took place. Shortly after those events, the bitcoin rally began. In the long term, the strengthening of BTC will continue, by 2024 the cryptocurrency could rise in price to $80,000, the agency believes.