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Bitcoin Price Prediction: Here’s Why BTC is Getting Red Hot

The Bitcoin price soared to the highest level since May as investors reflected on the decision by El Salvador’s government to buy 200 BTCs worth more than $10m. The BTC is trading at $52,458, which is significantly higher than the July low of about $30,000.

Why are Bitcoin prices rising? 

There are three main reasons why the BTC price is in a major rally. First, investors are cheering the recent moves by El Salvador to accept BTC as a legal tender. 

To match its words, the country’s government decided to buy BTC worth more than $10 million. This is a notable amount when you consider that the country has a relatively tiny GDP. 

Second, Bitcoin is rising because of technical reasons. After dropping to a multi-month low of $30,000, investors believe that it reached an important bottom. They equate that price action to how the coin dropped to below $4,000 when the Covid-19 pandemic was starting. 

Third, with Bitcoin currently in a new bullish wave, analysts believe that more institutional investors will move into the industry. Indeed, in a note, the multi-billion dollar German asset manager Union Investments, said that it was looking forward to invest in cryptocurrencies. At the same time, on-chain data shows that many whales are still holding their Bitcoin. 

Bitcoin price prediction 

A quick look at the daily chart shows that the BTC price is breaking barriers in the past few weeks. First, the coin moved above the first psychological level of $40,000 in August. Second, it rose above the key resistance level at $41,333,which was the highest level on June 16th. After that, it rose above $50,000 followed by $50,337. Along the way, the coin moved above the short and longer-term moving averages. 

Therefore, the path of least resistance for the BTC price is to the upside. The key level to watch next will be the resistance at $55,000. However, a drop below the key support at $50,000 will invalidate this view.