Bitcoin price continues its rally from the $10,000 with little or no resistance in sight. However, bulls should be aware that $12,500 is the previous level from which Bitcoin got rejected in August. Is there a case for a possible double top?
Large Corporations Embracing Bitcoin
The frenzy on Bitcoin lately was triggered by large corporations revealing some interesting investments in the crypto space. Square and MicroStrategy pledged over $150 million together to Bitcoin.
Moreover, the Stone Ridge Asset Manager announced a $100 million investment in Bitcoin too. Furthermore, the investment will be run by a subsidiary, NYDYG, which plans to raise new equity worth of another hundred million dollars.
All in all, investors have an explanation for the sudden interest in Bitcoin. Also, the recent developments in the Bitcoin market were responsible for the correlation with the risk-on assets to break momentarily.
For example, every time the Bitcoin rallied this year, it did so in reaction to a rise in the stock market. Or, every time it fell, it did so because the markets were in a risk-off mode.
Not anymore. The trigger on the recent move higher seems to be the Square investment from a couple of weeks ago. From that moment on, the stock market fluctuated up and down, moving mostly with a bearish tone – but the Bitcoin price did not follow.
Bitcoin Price Technical Analysis
The technical picture looks bullish. If we consider the pivotal $10,000 level (i.e., the black horizontal line on the chart below), we clearly see that it acted first as resistance and next as support. Now that the Bitcoin price bounced from it, the chances are that it will try for a new high when compared to the $12,465 high made on August the 17th.
Shorting Bitcoin on the current price action makes no sense. However, going long makes no sense either, as the risk of a double top mounts. Therefore, bulls that are already on the long side may consider tightening their stops. Bears may want to wait for the price to move back below $11,000 before shorting against the high and with a risk-reward ratio bigger than 1:2.
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Bitcoin Price Forecast
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