Bitcoin surged higher towards $12,000 on Tuesday as bulls renewed their buying pressure. The leading crypto managed a break above this important psychological level that had held as strong resistance for months.
BTC Chart by TradingView
Bitcoin is trading above $12K for the first time since Aug 17 at its price of 12,199 during publication time.
The king coin registered a six-day streak of gains last week, prompting many buyers to project that it would soon cross the $12K hurdle. Investors now expect BTC to move higher in the days ahead, since macro trends favor the Bitcoin bulls.
As BTC surges higher, top altcoins have suffered a retracement. Leading DeFi coins have plunged 5-20% in the past 24 hours as per data from CoinMarketCap.
It appears that investors are fleeing altcoin markets in favor of BTC at the moment, and capital from altcoins is cycling into Bitcoin markets en-masse.
BTC Dominance Likely to Continue
Prominent crypto analysts have shared their sentiments over the BTC rally past $12K. For instance, Crypto Michael explained that he expects BTC to continue rising for the next couple of months before peaking in December. He added that the king coin should continue outperforming altcoins until December, when altcoins may start rallying higher and catch up to BTC.
Simon Peters, an analyst at eToro, looked into the reasons behind this latest BTC rally.
“Bitcoin has been on a steady rise over recent weeks, driven partly by the news of Square’s $50 million bitcoin buy, and perhaps more substantially because of recent comments from U.S. Federal Reserve Chairman Jerome Powell regarding CBDC adoption in the U.S.,” he wrote.
Indeed, the Federal Reserve Chairman Jerome Powell admitted recently that his agency was looking into launching a digital dollar. The comments were viewed as bullish for crypto, as they essentially validated digital currencies and their underlying blockchain tech.
Bitcoin has also benefited from the FUD brought on by the upcoming Nov. 3 U.S presidential election. As the political event approaches, risk-on assets have demonstrated increased uncertainty, resulting in the decline of the U.S. dollar index.
Meanwhile, a weakening dollar has sparked increased biddings for alternative stores of value such as BTC and gold, causing them to rally.
Bitcoin Bulls Must Flip $12K to Support
The BTC bulls appear to be back in the driving seat as the coin looks well poised to see a further uptick. Moreover, the average value of BTC transactions has hit a new yearly high at $151K amid heavy BTC accumulation from Institutional investors.
However, Simon Peters is urging traders to be cautious. The eToro analyst stated that the BTC price hasn’t convincingly held above the $12K threshold in the past. He thus advised investors to watch how the market reacts to the $12K price before looking to the next Bull Run.
The coming few days may validate or invalidate Bitcoin’s rally, as the $12K level has historically catalyzed intense selloffs. For a sustainable move higher, the BTC bulls must flip the resistance at this level into support.