Bitcoin finding support above the $10,000 level echoes the bull-run experienced in 2017. According to Cointelegraph analyst filbfilb, the flagship cryptocurrency has what it takes to edge higher as it remains supported above the 20-week moving average.
The cryptocurrency has been on a tear in 2020, in response to developments around the scene that have triggered demand for alternative assets. COVID-19 taking a toll on the global economy amid rising geopolitical tensions has seen investors scamper for safety away from risky assets in favor of gold and now Bitcoin.
Bitcoin has so far emerged as a reliable store of value rallying by more than 70% since the start of the year. The cryptocurrency has outperformed gold and the U.S dollar that have always acted as a store for value in times of crisis.
Given the solid performance, filbfilb believes the cryptocurrency could rally past the $12,000 handle on finding support above the $11,200 level. According to Cointelegraph analysts Michael van de Poppe, failure to find support above the $11,200 level could result in Bitcoin correcting back to the $10,000 handle.
OKex research arm and analytics company Catallact in a research note to investors pointed out that Bitcoin remains well supported above the $10,000 mark. A return below the $10,000 mark remains unlikely given the current investment environment.
Bitcoin Price Action Drivers
Supporting further spikes in Bitcoin prices is the building up of institutional investor’s pressure at current levels. The likes of Grayscale and MicroStrategy continue to fuel buys outpacing newly mined Bitcoins.
U.S inflation rising beyond expectations is another development likely to continue supporting higher Bitcoin prices. According to the Labor Department, the consumer price index jumped 0.6% in June twice what many economists were expecting.
Investors are increasingly turning to Bitcoin to hedge against an uptick in inflation, given the current hard economic times. A further uptick in inflation should work to Bitcoin strengths expected to fuel an uptick in prices on increased hedging.
Likewise, the coronavirus pandemic triggering deflationary environment could see Bitcoin’s potential as a medium of exchange rise even further. Deflation should spur the purchasing power of Bitcoin as a monetary unit.
Bitcoin has been on an impressive run in 2020 as the race to mainstream adoption continues to gather pace. After many years of doubt about the long-term crypto prospects, institutional investors are increasingly betting on the cryptocurrency.
Coinbase Borrowing program
The race to mainstream adoption has seen Coinbase confirm that it will soon allow U.S customers to borrow a percentage of their Bitcoin holdings in cash. The push seeks to give U.S customers more control of their crypto holdings following the recent spike to more than two-year highs.
U.S customers will soon be allowed to borrow up to 30% of their Bitcoin holdings. The easy to use program does not require borrowers to fill out lengthy application forms or go through any credit check.
However, the program caps credit lines to $20,000 per customer while offering an 8% interest rate for Bitcoin backed loans. Just like Coinbase, Square is also trialing a lending product that will give customers short term microloans as part of its crypto-friendly Cash App.