Bitcoin started the week above $11,000 as new gains hold – will the next level be $12,000, or will the bears gain control?
These five factors could help decide whether this week is bullish or bearish for Bitcoin price action.
US Presidential Elections Could Push the Dollar Back to 2018
BTC remains sensitive to macroeconomic events as the fourth quarter continues. The run-up to the US elections could create significant turbulence.
Analysts say that the outcome of a Democratic victory looks bleak for the US dollar currency index.
Goldman Sachs warned that Joe Biden’s entry into the White House could scare markets up front, pushing DXY to its 2018 lows.
BTC has historically had a strong inverse correlation with DXY, and the new lows could be very helpful. In August, the highs of $12,500 for the BTC/USD pair came in tandem with DXY dropping to just over 92 points.
Europe Fights Brexit and the Coronavirus
Concerning the coronavirus, new restrictions across Europe will likely raise further economic concerns.
With the “second wave” seemingly firmly underway, several countries are trying to enact repeated blockade-style measures this week.
Amid the turmoil, last-minute Brexit negotiations add to the UK’s headache, with a deadline for reaching some consensus on exiting the European Union just days away.
High Hash Rate Leads to Bitcoin Fundamentals
This week, the fundamentals of the Bitcoin network are not so dark. Depending on the metric used, the hash rate hit new all-time highs over the weekend, suggesting that more computing power is being devoted to mining than ever before.
According to a popular theory, highs in hash rate and jumps in network difficulty tend to produce Bitcoin price spikes later on.
Consolidating the Feeling
According to the Crypto Fear & Greed Index, investor sentiment is slowly strengthening when it comes to Bitcoin.
August sparked the overload warnings. Market indicator data shows that a subsequent decline is now balancing out.
That puts investor sentiment in “neutral” territory, a relief from August and fear that followed it.
The index is intended to show when a market sell-off should happen.
Volatility, market momentum, and volume compose half of the weighted basket of factors that produce the score.
We Go Much Higher
Lastly, even though few expect its sudden jump above $11,000, Bitcoin pundits are betting on more significant gains.
Analysts noted that the area of around $11,000 previously formed a key area to break out.
Vijay Boyapati, a researcher, tweeted that Bitcoin is going much higher.
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