Bitcoin, the leading cryptocurrency, rose sharply, driven by increased trading volume following its nearly 5-week weak course, reaching the highest level seen since August 2019. In particular, the number of the Bitcoin Whales, which refers to the number of accounts with more than $ 1 million worth of Bitcoin, increased significantly in the last few days, exceeding 18k, and significant developments are behind the movements of the leading cryptocurrency, which is the subject of strong buying transactions, in the bull market.
With investor risk appetite sharply depreciated after the novel coronavirus (Covid-19) was declared a pandemic by the World Health Organization (WHO) in March, and the debates over whether BTC is a relatively risky financial instrument, Bitcoin also depreciated strongly, falling as low as 3 800. In this period, the central banks of developed and developing countries reduced borrowing costs and implemented monetary expansion in order to minimize the downward pressures that the coronavirus crisis will create in economic activities, in other words, injecting abundant liquidity into the markets, market participants started to seek for yields.
Liquidity, which has also turned to cryptocurrencies after precious metals and stock markets because reserve currencies do not offer real interest as risk-free returns, pave the way for Bitcoin to recover a significant portion of its losses. However, Bitcoin took a break with economic activity opening up to this 8-week determinant rise in question. In addition to the economic activities that started with controlling the production rate of the pandemic in developed countries, stock market indices rallied as a result of the support of enterprises and individuals for the locomotive sectors of economies in line with high subsidies and liquidity, cryptocurrencies briefly took second place. The leading cryptocurrency, however, entered a short-term balancing process.
Since the second half of the year, tensions on the US – China line, the world’s two largest economies, rose again due to the consulate crisis and as stock market indices decelerate, Gold renewed its all-time high. Thus, market participants started to look for a new field for earnings and chose cryptocurrencies. Following rising Bitcoin led by futures contracts, popular altcoins such as Etherum and Ripple showed a strong increase. It is worth noting that the total of open positions in the Bitcoin futures market reached up to $ 5 billion for the first time since March, according to Skew Analytics.
On the other hand, there was speculation that digital payment giant PayPal will soon launch crypto-based payment services and the report prepared by trillion-dollar investment giant Fidelity on cryptocurrencies, emphasizing Bitcoin as a ‘Passionate value saving tool’ and stating that it is at the very beginning phase, may become effective in increasing the demand for cryptocurrency, which turned into a billion-dollar-global-market, to 332.78 million USD.
Technically, it is observed that the leading cryptocurrency, which had been recovered decisively until May with the purchases in response it faced after the sharp decline in March 2020, entered the balancing phase for about 2 months. Bitcoin, which is experiencing strong price pressure, especially as it prepares to wrap up July, aggressively headed for value gains, up 15.8 per cent in the week we left behind after a relatively horizontal course. Bitcoin, which ended its negative trend by performing this hard rise in the intermediate ascending trend, is trying to maintain its current earnings by turning to closes below the critical resistance it faced at the upper barrier of the minor price channel. In this context, Bitcoin, which performs positive pricing after the descending trend it ended, can put pressure on this region and break Fibonacci 100 percent expansion line indicating 11 450 level with permanent closes. Then, Fibonacci 161.8 percent expansion line indicating 12 850 level can become a new target after 11 900 and 12 400 resistance levels.
Resistance: 11 450 – 11 900 – 12 400 – 12 850 Support: 11 000 – 10 600 – 10 200 – 9 650