Bitcoin’s break above $20,000 boosted investor sentiment and triggered strong rallies from several altcoins.
Crypto traders and investors received an early Christmas gift today as Bitcoin (BTC) price cleared the $20,000 psychological milestone for the first time in history. Today’s breakout is equally significant as it serves to heal the scars of the traders who may have bought right at the top in 2017 and held their positions until now.
The current uptrend in Bitcoin has been all about institutional adoption. The latest institutional investor to have announced a position in Bitcoin is the United Kingdom-based investment manager Ruffer Investment Company Limited.
As has been the case with most institutional purchases this year, Ruffer said that they bought Bitcoin as an “insurance policy against the continuing devaluation of the world’s major currencies.”
Institutional participation has been so high that the Bank of America Merrill Lynch Global Fund Manager Survey shows that respondents believe that Bitcoin is the third most crowded trade behind technology stocks and short positions on the U.S. dollar.
Institutional investors have continued to flock to Bitcoin because it has outperformed most major asset classes by a wide margin. Hence, institutional investors who were early to the Bitcoin party are most likely sitting on huge profits and their portfolios are outperforming other fund managers who only own legacy markets. As Bitcoin continues to draw more attention from the investor class, inquisitive clients may force more institutions to allocate a portion of their money to BTC.
Now that Bitcoin has resumed its uptrend let’s analyze the charts of the top-10 cryptocurrencies to identify the target objectives on the upside.
Bitcoin (BTC) has soared well above $20,000 with a strong breakout. This shows that several traders have jumped in after the break above the psychological round figure at $20,000.
Any asset that makes a new all-time high is in a strong uptrend. The BTC/USD pair has completed an ascending triangle pattern, which has a target objective of $22,808.98. If this level is also crossed, the pair may reach $25,000.
The relative strength index (RSI) has still not reached the overbought zone, which shows that the BTC/USD pair has room to rally to the upside before the markets get overheated in the short-term.
Usually, after every breakout, the price turns down and retests the break out level. If the bulls buy this dip, then the level acts as a new floor. In this case, if the bulls flip the $19,500 level to support, the uptrend will remain intact.
This bullish view will be invalidated if the price reverses direction and breaks below $17,500.
Ether (ETH) has surged today and reached the $622.807 to $635.456 overhead resistance zone. If the bulls can push and sustain the price above the zone, it will complete an ascending triangle pattern which has a target objective of $763.614.
The upsloping moving averages and the RSI above 61 signal that the path of least resistance is to the upside.
Contrary to this assumption, if the price turns down from the current levels or fails to sustain above the resistance zone, then a drop to the 20-day exponential moving average ($572) is possible. A strong rebound off this support may keep the uptrend intact.
However, if the bears sink the price below the 20-day EMA, it will suggest that traders are booking profits at higher levels. Such a move could keep the ETH/USD pair range-bound for a few days.