Bitcoin rallied on Wednesday as traders brushed aside concerns related to the successful trial of Pfizer-BioNTech’s experimental COVID-19 vaccine.
The flagship cryptocurrency attempted another bull run towards $16,000 — third in five days — but fell short of testing the psychological resistance level. As of 1100 EST, it was changing hands for as much as $15,894.
That was not the case for Bitcoin. The cryptocurrency continued to attract higher bids also as Stan Druckenmiller, a billionaire investor, admitted that he holds Bitcoin as protection against monetary inflation.
With Stan Druckenmiller, Michael Saylor and more listed companies jumping in to the #bitcoin markets, it’s quite clear th at we’re at the early stage of a new bull cycle. pic.twitter.com/kT2dNyDCpu
His statement helped the cryptocurrency avoid a bigger sell-off. Investors’ focus came back on its long-term bull case, driven by the global central banks’ near-zero or negative interest rates and quantitative easing policies.
“Unlike any other asset class, Bitcoin’s risk is reduced as price increases as the profitability invites additional infrastructure and development, which in turn, secures the ecosystem further,” explained Mira Cristanto of Messari.
‘We anticipate its value could accrete with expanding adoption and the network effects that have propelled growth in the digital age,’ she added.
On technical merits, Bitcoin risked a price correction.
The cryptocurrency’s intraday high on Wednesday prompted a section of traders to decrease their long exposure. Many on Twitter admitted selling-off their Bitcoin holdings as the cryptocurrency approached $16,000.
Their action was visible in the price correction that followed shortly after Bitcoin touched $15,894. The cryptocurrency fell to $15,760 but maintained its overall intraday bullish bias by holding a price floor above $15,190, an interim support level.
Meanwhile, the latest price action also showed Bitcoin consolidating inside an Ascending Triangle. The cryptocurrency repeatedly tested a horizontal resistance trendline while locating a supportive floor in a rising slope.
It raised the possibility of Bitcoin to undergo another downside correction upon testing the resistance. That partially explains why BTC/USD experienced a comparatively higher selling pressure near $15,894. Traders may have increased their short positions towards the Triangle support trendline.
Therefore, the coming sessions could see BTC/USD fluctuating inside the Triangle range.
As the pair does, it would also provide ample opportunities to daytraders for making short-term gains: By opening a short position towards the upward slope upon a pullback at the resistance and opening a long position towards the resistance trendline after rebounding from the upward slope.
The occurrence of an Ascending Triangle in an uptrend also increased Bitcoin’s likelihood of logging a bullish breakout. Should it happen, the price can rise by as much as $2,000 by the end of this year.