Bitcoin retained its short-term bullish bias on Monday after Donald Trump signed the second coronavirus stimulus package that would distribute funds worth $900 billion among millions of American households and businesses.
The flagship cryptocurrencyjumped almost 4.5 percent to hit an intraday high of $27,477 despite falling to as low as $26,086 earlier in the day. Entering the New York session, the BTC/USD exchange rate corrected lower owing to profit-taking. Nevertheless, the pair managed to stick around $27,000, a psychological support level.
Mr. Trump’s signing of the stimulus bill promises to keep the Bitcoin’s bullish bias intact. Bulls argue that an increasing fiscal deficit creates downside pressure on the US dollar. Since September, mainstream corporations and investors have collectively purchased about half a billion worth of Bitcoin merely because of their fears of fiat depreciation and higher inflation in the coming years.
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That has put Bitcoin en route to one record peak after another. Earlier in December, the cryptocurrency managed to breach above its long-eyed $20,000-resistance level. But despite its overbought status, Bitcoin extended its uptrend to score new highs, the recent being $28,387 achieved this Sunday.
Independent market analyst, known by the pseudonym of CryptoHamster, said Monday that he sees Bitcoin hitting the $32,000-level in the coming session. Nevertheless, his cues were more technical than fundamental.
Bitcoin Four-Hour (4H) Chart
CrytoHamster noted that the Bitcoin price is currently consolidating inside a structure that appears like a Bull Pennant.
In retrospect, a Bull Pennant is a bullish continuation pattern that forms when an asset pauses its uptrend. Typically, it ends up continuing in the direction of its previous trend, eyeing levels that are as much a way as the previous bull run’s height.
The chart above shows Bitcoin and its recent Bull Pennant diagrams. The blue areas highlight the consolidation pattern, while the blacked and bold sticks represent the breakout moves. As CryptoHamster noted, the recent consolidation setups achieved their breakout targets successfully, hinting that the current one would also do the same.
“The fact that I personally don’t like those doesn’t mean that such things cannot play out,” the analyst TWEETED. “Previous pennant (kinda) reached the max target. Now, there is another one: $28,000 and $32,000 as targets.”
Meanwhile, some analysts warned about an imminent Bitcoin price correction as its price ventures further into “overbought” on longer-timeframe charts. For instance, Michaël van de Poppe stated that the price could fall to as low as $19,400 should the sell-off sentiment returns at the local highs.