Ever since 2019, Bitcoin is on a steady uptrend, with much optimism and buoyancy. After recovering from a big crash due to the COVID-19, Bitcoin is back at an all-time high price since mid-2019.
The PayPal news: a lasting uptrend or a fad?
When PayPal first announced their adoption of cryptocurrencies, the whole crypto market was affected and was green for the day, as PayPal might introduce other cryptocurrencies in the future.
Top 5 green movers (24h):
Bitcoin price analysis: The perfect uptrend continues
Bitcoin moved from its previous levels of USD 11,700 to breach the USD 12,700 level as stated in our previous article. It is important though in this article, that short-term traders place their stop loss levels correctly without being thrown out by the market.
When plotting the Fibonacci retracements from the previous consolidation level of USD 11,700 we can notice a strong support level of USD 12,680 at the 38.2% Fib level, tested 4 times (yellow arrows fig.1). This might be a good Stop Loss level for short term traders who recently entered the market, as any drop in prices might lead to the other support level of USD 12,000.
For short term traders, a sensible price of USD 14,000 would be an ordinary profit taking level, as Bitcoin faces no real resistance until its all-time high. This would also break the previous high for 3 years. If the price continues extending above the blue line in Figure 2, the momentum continues with the uptrend, and reaching the price of USD 16,000 again would be sensible despite reaching the extended overbought RSI area (fig.2).
What if things go south?
One can never be sure in trading, but always confident. To avoid those situations, the stop loss levels in figure 2 should be key for short term traders, and the blue trend line for swing traders, which give a general consensus about the current uptrend. Will Bitcoin go back to its psychological USD 10,000 price level? If things progress the way they are and the fundamentals are looking good, it is most probable that the profit-taking levels will be reached:
Before 2021, TP#1
After 2021, TP#2
Future possibilities of the PayPal Announcement
PayPal has over 340 million users, and is one of the leading online payment businesses, allowing users to make payments and transfers online. In parallel, there are only 21 million bitcoins. Increasing the demand for cryptocurrencies by only 5% of PayPal users will definitely have a huge impact on its price, as currently there are 400,000 daily bitcoin users. This will raise the daily bitcoin users x5 minimum.
Stay ahead, stay updated
Rudy Fares