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The past few weeks have seen a slew of Bitcoin analysts demanding a rise towards $ 16,000, a level that was last tested in January 2017 during a corrective downtrend from its all-time high near $ 20,000.
The cryptocurrency breached $ 16,000 on November 11, 2020. Some traders sold their positions near the level, causing Bitcoin to correct below it. However, any attempt to lower the price below $ 15,000 has met with huge buying demand from traders with a medium to long term risk appetite. Hence, Bitcoin recovered $ 16,000 again.
Traders have since refused to give up the tier. It looks like new support that could push Bitcoin’s price further higher. In the short term, uncertainty driven by an increasing number of coronavirus infections in the United States supports the bullish outlook.
Coronavirus in the foreground
People expect the government to re-enforce strict social distancing measures that conflict with companies that rely on human interactions. This could hamper the Donald Trump administration’s plans to fully reopen the US economy, thus hampering a recent recovery in unemployment data and other sectors of the US economy.
Meanwhile, a worsening pandemic could fuel demand for the second coronavirus relief package. Federal Reserve Chairman Jerome Powell warned in the latest officials meeting that their office could not go on with extremely low interest rates and endless bond purchases without a stimulus.
Bitcoin has grown nearly 250% after the first relief from the coronavirus stimulus in March 2020. Source: BTCUSD on TradingView.com
The relief bill is stalled for months due to a lack of bipartisanism between the Democrat-controlled House of Representatives and the Republican-majority Senate.
The main focus is now an ongoing run-off for two seats in the Georgia Senate. If the Democrats led by Joe Biden both win, their hold over the Senate would make it easier to pass the second coronavirus package.
If not, the US economy’s only bullish hope is the vaccine, especially after the announcement of Pfizer and its pharmaceutical partner BioNTech last week. They claimed their experimental COVID-19 showed 90% effectiveness.
Both fundamental drivers offset each other. This allows investors to maintain hedging in assets that have the least correlation with macroeconomic events.
As a result, Bitcoin is doing better than most of its safe haven rivals.
The cryptocurrency has risen staggeringly higher than the vaccine news. On the other hand, his best competition gold recorded the worst one-day performance in a decade. The cryptocurrency now expects to trade cautiously near $ 16,000 until further clarity from the US political and economic space.
Bitcoin this week
Technically, Bitcoin is in a bind near $ 16,156 based on a Fibonacci retracement chart drawn from a high swing of $ 19,697 to a low swing of $ 3,153. Coronavirus-induced market uncertainty could lead traders to sell local highs and lower targets for re-accumulation.
Bitcoin’s next weekly breakout plans to bring its price close to $ 20,000. Source: BTCUSD on TradingView.com
Losing $ 16,000 at this stage would mean an extended downward correction towards $ 15,000 or less.
Holding it, at the same time, would cancel the rush to $ 17,000 or more. But with two clearing fundamentals and the US presidential election behind the scenes, Bitcoin has more reason to wait and watch than to continue its bullish trend towards another annual high.
