Bitcoin price rally has paused today as traders react to the latest Covid-19 vaccine news. The digital currency is trading at $15,395, which is a few points below this week’s high of $15,903.
Bitcoin dropped abruptly yesterday after Pfizer confirmed that its vaccine was about 90% effective yesterday. That led to a surge in global stocks, with the Dow Jones crossing the closely-watched level of $30,000. Other global benchmarks reached new highs as well.
The price action on Bitcoin was mostly because the currency is viewed as a modern-day safe haven. Therefore, with a vaccine, the haven factor is eliminated, which makes BTC unattractive.
A Covid vaccine would be a good thing for the world economy. It would reduce Covid deaths and prevent the world from moving into another recession. It would also remove the incentive for most governments to add more stimulus, which would be positive for Bitcoin prices.
Bitcoin price technical outlook
On the daily chart, we see that Bitcoin price has been in a strong rally since March when it fell to $3,840. It has risen by more than 300% since then. The price remains above the ascending trendline that connects the lowest levels in March and October.
It is also above the 25-day and 50-day exponential moving averages, which is evidence that bulls remain in control. Most importantly, BTC seems to be forming a bullish pennant flag pattern.
Therefore, I suspect that the price will break-out soon as bulls aim for the next resistance at $17,000. On the flip side, a move below the psychological level of $13,000 will invalidate this trend.
Bitcoin Technical Analysis