The Bitcoin price broke above $11,000 impulsively as an increasing number of market participants continued to pile up on the largest cryptocurrency. For the first time since August 2019, the BTC valuation reached $12,000, raising speculations on whether the new long-term bull market had already started. About one month ago, we’ve covered Bitcoin and at that time the price was consolidating inside a range, dropping after a Twitter scandal involving a BTC scam attempt.
Various metrics suggest Bitcoin interest is on the rise
Cryptocurrency users are opening an increasing number of Bitcoin wallets, according to Glassnote, an on-chain monitoring source. At the same time, retail individuals have increased Bitcoin-related searches on Google, as their attention is caught by positive news regarding the impulsive rise in valuation.
With a 60.8% market dominance and $218 billion in market capitalization, Bitcoin is still the undisputed market leader, trailing Ether, the second-largest crypto, by a wide happens. That happens even though Ether staged a massive rally, and reached $400 token valuation.
Whether or not this is the beginning of a new long-term bull market is still not yet confirmed, given financial markets had been heavily distorted by central banks’ intervention. With a liquidity flush, funds had been pouring into riskier assets, including Bitcoin, favored by a weakening US dollar.
Bitcoin drives the entire market higher
The positive Bitcoin sentiment since the March selloff had been a major tailwind for the broader cryptocurrency market. Some altcoins like Cardano had managed to break above the 2019 highs already, even though BTC is on track for a retest.
From our point of view, Bitcoin will need to break impulsively above $14,000 to confirm that a major bull run had started. If that would be the case, we could expect to see the price rising towards the all-time high near $20,000 by 2021. However, despite the short-term optimism, from a long-term perspective, Bitcoin could face several roadblocks along the way.
Financial markets are being driven by emotions and any factor altering the current bullish sentiment will be a major headwind for the price of Bitcoin moving forward. In the past few months, Bitcoin had been moving ahead alongside stock markets, so we can assume that renewed pressure in stocks will also start to weigh on BTC as well.
However, for now that’s not the case and Bitcoin looks poised for a retest of the $12,000 key resistance and psychological area. If a breakout higher takes place, we suspect more buying will occur, triggering stop losses and squeezing sellers out of the market.