Bitcoin is gaining strength from the $13,000 support level
Last Updated on November 1, 2020
Bitcoin price action has turned sideways amid concerns over possible coronavirus closures across Europe, creating some clearly defined support and resistance levels around $ 13,000.
Yesterday, the standard cryptocurrency continued to make good progress above the $13,000 level and started a new increase, until it broke the $13,500 resistance level, achieving a 5% raise after the European Central Bank’s stimulus announcement, but soon a sharp downward correction took over prices to drop from $13,500 until they fell To below $13,000, however, the declines were limited as the price bounced back sharply breaching the $13,200 and $13,380 levels to return to positive territory and are currently trading in this range.
Bitcoin now faces stiff resistance near $13,650 and $13,700, as it has already made two attempts to gain momentum above $13,650 but failed.
The factors that kept the height
During the past week, Bitcoin continued its upward momentum despite the negative macro factors, the US stock market witnessed a sharp decline, and the numbers of Coronavirus cases across the United States and Europe rose sharply, increasing investor concerns.
On the other hand, the perception that Bitcoin is acting like a safe asset increases significantly, due to the recent rise in institutional demand, but when risky assets such as stocks decline, it may impose indirect pressure on the cryptocurrency.
As such, when stocks rise and risky assets flourish, the short-term outlook for Bitcoin’s price improves.
During yesterday’s dealings, there were several events that caused an increase in appetite for riskier assets, first: the European Central Bank’s announcement that it was seeking to provide a new stimulus package next December, and second: The weekly US job claims data, the lowest since the start of the Coronavirus pandemic, reflected positively on Market sentiment.
The second stimulus package in Europe achieves two things: it significantly increases the appetite for risky assets in Europe, and second, these comments should pressure the US to offer a much-needed stimulus package.
Bitcoin rejects a bigger move down $12,700
When the bitcoin price fell below $ 13,000, technical analysts said it was in danger of falling to $ 12,700 or less.
But the $ 13,000 level was a strong support area supported by whale groups and buying orders, Bitcoin’s defense of 13,000 indicates that buyer’s demand overcame massive selling pressures as evident in the futures market.
The bitcoin futures market financing rate has remained negative for the past several days, and this indicates that the majority of the derivatives market is betting negatively on the currency, however, the demand for cryptocurrency from the spot market offsets the selling pressures and defends it against further decline.
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