Four Possible Factors Behind Bitcoin’s Current Parabolic Run

Bitcoin (BTC) has recorded yet another leg up, as the benchmark cryptocurrency records a fresh all-time high near $35k. Just a few weeks ago, this price range was deemed unattainable by many speculators. The cryptocurrency has recorded consecutive record highs over the past few days, with no sign of a slowdown.

That said, here are four possible reasons behind this historic rally.

1- Large/Corporate Investors Are Coming On Board

The COVID-19-induced financial collapse gave Bitcoin a level of credibility never seen before. The previous “illegal money” sentiment surrounding the cryptocurrency was lifted, following the role it played as a risk hedge. Huge buy-ins from big players like Square, MassMutual, MicroStrategy, and One River—to mention a few—increased the appeal of Bitcoin, due to the perceived drought of supply such purchases were believed to induce.

2- Bitcoin’s Natural Cycle

Since its inception, Bitcoin has always exhibited cyclical behavior—especially around this time of the year—of growth, decline, stability, and new record highs. That said, the current parabolic run could be BTC fulfilling another cycle.

3- A Weakened Dollar

The recent Coronavirus economic crisis hit the greenback hard as a result of desperate attempts by the Federal Reserve to pump life back into the economy. The way to bolster the economy from the COVID-induced crash was to pump more money into the economy, which—inadvertently—thwarts demand for the dollar and boosts demand into perceived safer assets like Bitcoin.

4- Another Attempt at a Bitcoin ETF

As the US prepares to change administrations this month, we could see a more receptive outlook to a BTC ETF. VanEck has applied, yet again, for a Bitcoin ETF. Considering that the previous SEC boss, Jay Clayton, has resigned and his successor is more open to cryptocurrency matters and innovations, speculators are optimistic about a BTC ETF this time.

Key BTC Levels to Watch — January 3

Just like we predicted in our last analysis, Bitcoin recorded a surge from the upper-$29k area after venturing into a wedge. That said, the ensuing rally was beyond predictable, as the primary cryptocurrency cleared several key resistances in one fell swoop.

BTC is currently in a modest pullback likely to the $31,500 area before it resumes on its journey upwards.

Meanwhile, our key resistance levels are at $33,300, $34,000, and $34,776. While our key support levels are at $32,500, $31,500 and $30,000.

Total Market Capitalization: $864 billion

Bitcoin Market Capitalization: $606 billion

Bitcoin Dominance: 70%

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