Bitcoin is fighting the 12 000 USD resistance

The world’s largest cryptocurrency Bitcoin got over 12 000 USD twice in the last few days. It was not able to stay there for much longer than a few minutes though.

Bitcoin(₿) is a cryptocurrency invented in 2008 by an unknown person or group of people using the name Satoshi Nakamoto and started in 2009, when its implementation was released as an open-source software. It is a decentralized digital currency without a central bank or single administrator that can be sent from user to user on the peer-to-peer bitcoin network without the need for intermediaries. /source wiki/
 

Current market overview 

Bitcoin saw a strong performance towards the end of July. There can be various reasons leading towards this state although the most probable is a combination of multiple causes such as poor performance of the US dollar, protection against possible inflation caused by announced “printing of new money” or simple FOMO,  “fear of missing out”. It is because bitcoin and cryptocurrencies in general have tendencies to rapidly accelerate price movement and even small change can cause rapid spree of selling or buying (Best example would be famous winter of 2017/2018).
 

Even though the Bitcoin experienced quite a drop as the Coronavirus hit in the middle of the march 2020, It was slowly rebuilding it positions. Multiple enterprises, funds and famous investors openly endorsed bitcoin and it was slowly but steadily gaining momentum.
 

This growth culminated when the world’s largest cryptocurrency got over 12 000 USD twice over the course of the last few days. It was not able to stay there for much longer than a few minutes though. Everytime it got over the resistance it was followed by a drop. The first one quite big, over 1400 USD. The second time it went over 12 000 USD was on Sunday around 10:20 UTC. Butit fell shortly after by nearly 500 USD.


Chart: Daily chart of Bitcoin (Source: Metatrader 4 PurpleTrading) 

 

12 000 USD test again 

These massive drops can be attributed to huge volatility caused by two factors. One is the low level of liquidity, which is one of Bitcoin’s hallmark traits due to digital scarcity. The second is an increasing amount of crypto exchanges who offer extreme leverage.

Currently Bitcoin is trying to slowly overcome the 12 000 USD barrier again but is being slowed down by correction of the USD that is rising from its lowest point since 2018.

Despite its high volatility Bitcoin is considered as a digital safe-haven by many of its investors. Another growth is expected in the upcoming months and even moreso if the second wave on Covid-19 hits harder. On the other hand, possible vaccine could halt its growing trend.
 

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