BTC has made three unsuccessful attempts to hold above the $10,000 mark. Every time the initiative was grabbed by the sellers, and the BTC/USD had to pullback.
Market participants believe that next time, the luck may be on the side of buyers. Besides, these optimistic expectations can be justified by the fundamental background. Experts expect 2020 to be a watershed year for BTC/USD. This year, for the first time in 100 years, the risk of global inflation loomed over the financial market, which implies a global depreciation of traditional currencies. It is worth noting that this process has already begun and the dollar is at the forefront.
The US dollar index has dipped 6% since March 2020, which is quite a big drop for such a short period of time. Investors fear that the uncontrolled printing of money, which the Federal Reserve had to resort to mitigate the consequences of the coronavirus pandemic, will cause an even bigger collapse of the dollar, which is already gradually losing the status of the international reserve currency. The risk of global currencies’ devaluation is a new trend, forcing traders to look for the alternative among safe-haven instruments. Gold is perfectly suitable for this role, demand for which is now increased and keeps growing, which is confirmed by its exchange rate. At the time of writing (late June), gold remains at its multi-year highs, namely above $1,770 per ounce.
Why inflation of traditional money can be considered a guarantee of bitcoin growth? The increase in the money supply results in higher prices of goods and services. The money is constantly depreciating. It is the loss of the purchasing power of money that forces investors to transfer capital to assets that are not exposed to this risk. If Bitcoin had a decent historical background, it would be the best investment alternative to gold today. However, BTC appeared only a few years ago and is still struggling to get global recognition.
The best proof of an asset’s resilience to global economic upheavals is its profitability during these periods. Bitcoin has added more than 35% since the beginning of 2020. Crypto enthusiasts believe that the increased BTC attempts to break through $ 10,000 resistance indicate that Bitcoin is ready for a new “bullish” rally. The Bloomberg Galaxy Crypto Index, which includes top cryptocurrencies, has come close to a critical threshold of 400. It is believed that a break above this level may become an additional driver for the upward rally. It’s worth noting that this index remains the main indicator of the crypto industry’s state for institutional investors. If the index holds above 400, it will trigger the influx of more money into the BTC, which in turn may propel the BTC/USD pair above the $ 12,500 mark. We recommend you not to hesitate and open long positions now, while BTC still costs less than $ 10,000.