One of the best asset classes this year is bitcoin. The digital currency is up over 80 percent in the last 12 months and is close enough to hit $20,000 last seen in December 2017. Analysts are predicting that it would close to an all-time high level before this year-end.
According to CryptoCompare data, the bitcoin price hit the $16,000 level yesterday. The price has been steadily moving up since October, from $11,000 to $15,800.
CryptoGlobe said, “Despite the price rise, analysts are cautiously looking at the cryptocurrency’s outlook. Its Relative Strength Index (RSI) is now overbought, while its MACD also points toward a correction. The Bitcoin Fear & Greed Index is also flashing “extreme greed,” which usually means a correction is due.”
However, this correction is expected after Christmas as soon as the prices touch the $20,000 level again. According to the historical trends, whenever the price of bitcoin made a continuous price increase, data shows the rise was followed by a correction between 20 percent and 30 percent. The correction comes before the uptrend is resumed, said CryptoGlobe.
Bitcoin, the world’s best-known and most valuable cryptocurrency, has more than doubled in price this year, a wild run that’s reminiscent of its monster rally in late 2017 that saw it narrow in on the $20,000 mark.
According to CNBC International, some crypto fans say it’s down to the unprecedented wave of stimulus from governments and central banks around the world aimed at tackling the coronavirus crisis. Such measures, they say, devalue fiat currencies, making bitcoin an attractive alternative.
An article by FXStreet said the bellwether cryptocurrency is trading at $15,920, while buyers fight aggressively to gain ground above $16,000. The odds seem to favor the bulls, as illustrated by the gradually up-trending Relative Strength Index (RSI).