It seems our prediction of Bitcoin scaling through this year at a stalemate of $8000 to $9000 might become feasible after all...from our previous post on Bitcoin to set a new Gold record!
Having taken the 61.8 percent Fibonacci retracement level yesterday, the world's largest cryptocurrency by market capitalization rose to eight-day highs above $7,520 today. As of writing, the bitcoin-U.S. dollar (BTC/USD) exchange rate is at $7,459 – a 2.54 percent gain for the session, as per CoinDesk's Bitcoin Price Index even as bitcoin transaction fees are getting higher with respect to transaction amount ($10-$60 per transaction) in the Bitcoin network.
Stepping back, prices had dropped 29 percent after the developers suspended a controversial software upgrade, known as Segwit2x, on Nov. 8. However, the sell-off was cut short near $5,500 by the 50-day moving average (MA) on Nov, 12. A rally in the subsequent days all but erased the likelihood of a drop to $5,000 levels. Then, yesterday, a move above $7,000 improved the odds of a continued rally to record highs above $7,800. Currently, BTC is just $312 short of its Nov. 8 record of over $7,800.
Possibly exerting influence on prices in recent days, comments on social media show the investor community has started analyzing the effect of a potential rotation of money out of stocks and bonds and into bitcoin. CME Group's recently announced BTC futures contract is likely to begin trading as soon as December.
The new offering will allow institutional investors to diversify into a high yielding asset like bitcoin – especially if the equity markets respond negatively to increased odds of a Fed rate hike.
The price action analysis also indicates the tables may have turned in favor of the bulls.